OMC stocks in the red as Brent surges past $91/barrel
Upstox
2 min read • Updated: April 5, 2024, 1:50 PM
Summary
Brent futures were trading near the $91.41/barrel mark as geopolitical tensions and production cuts by the OPEC+ continued to push prices higher. Oil marketing companies’ shares were trading in the red.
Oil prices continued to rise with Brent futures climbing to $91/barrel on Friday with geopolitical tensions in the middle-east continuing unabated. Shares of oil marketing companies were in the red but pared most of their losses by afternoon trading session.
OMCs opened more than 2.5% lower amid high oil prices
Shares of Hindustan Petroleum Corp Ltd (HPCL) were trading 0.39% lower while Bharat Petroleum Corporation Ltd (BPCL) shares lost 1.54% by afternoon. Indian Oil Corporation Ltd (IOC) shares were trading 0.94% lower. According to a report, every $1 increase in crude prices could dent the margins of oil marketing companies by 30-40 paise per litre.
Rising geopolitical tensions lift oil prices up
Futures of Brent crude, which is the global benchmark, were trading near the $91.41/barrel mark at the time of writing as geopolitical tensions and production cuts by the The Organization of the Petroleum Exporting Countries and its allies (OPEC+) continued to push prices higher.
Earlier in the week, OPEC+ had decided to maintain a status quo on its output policy which means voluntary production cuts of 2.2 million barrels per day (bpd) will stay in place at least till the end of June, in addition to the existing 3.66 million bpd of cuts decided in 2022.
Geopolitical tensions remain unabated
Furthermore, Israeli embassies across the world have been reportedly placed under high alert following fears of Iranian attacks on their diplomats. The tensions come in the wake of an Israeli airstrike on an Iranian consulate building in Syria’s capital city Damascus that left seven Revolutionary Guards and six Syrians dead. Iran’s supreme leader Ayatollah Ali Khamenei has vowed revenge saying that Israel would regret its crime.
At the same time, the United States has come out with its strongest public rebuke toward Israel since the beginning of its war with Hamas, according to a report. The U.S. has warned that its policy on Gaza will depend on whether Israel takes steps to address the safety of Palestinian civilians and aid workers, the report added