BPCL, HPCL & IOC shares gain as weaker economic data outweighs middle-east tensions

Shares of oil marketing companies (OMCs) rose on Thursday morning after oil prices fell 3% dragged by concerns over demand outweighing the ongoing tensions in the middle-east.

Shares of Hindustan Petroleum Corp , Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) were trading over 2% higher on Tuesday following the drag in oil prices. Futures of Brent crude, the global benchmark, were trading at $87.68/barrel on Thursday morning, down from the highs of over $90/barrel on Wednesday. At the same time, futures of West Texas Intermediate (WTI) were trading at $82.32/barrel, down from the levels of over $85/barrel on Wednesday.

A rise in U.S. inventories coupled with weaker economic data from China, which is among the top oil consumers in the world, helped calm down oil prices, according to a report. Furthermore, progress on the four bills regarding aid to Ukraine, Israel and the Indo-Pacific also helped in bringing down the commodity’s price, the report said.

These factors had countered the upward pressure on oil prices in the wake of the ongoing tensions between Israel and Iran. Israel had vowed to respond to Iran’s attack over the weekend even as Western nations have called for restraint. Israel's military Chief of Staff Herzi Halevi had said the launch of so many missiles, cruise missiles, and drones into Israeli territory will be met with a response, according to a report. However, the delay in Israel’s response appears to have acted in calming down the prices.

Meanwhile, OMC stocks have delivered decent returns in 2024. BPCL and IOC have gained over 30% since the beginning of the year while HPCL has risen over 21% in the period. On an annual basis, IOC posted a gain of over 122% in the last one year while HPCL rose over 112%. BPCL shares have gained over 81% during the period.