HPCL, BPCL, Indian Oil rise up to 8% as Brent crude price slips to two-month low

Shares of leading oil marketing companies— Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOC)— gained up to 8% in trade on Thursday after the Brent crude oil price eased.

HPCL shares closed at ₹535 apiece, up 8.09% on the NSE. The stock opened the session at ₹507 and gained as much as 8.01% to hit day’s peak at ₹536.75 apiece on the NSE.

Likewise, BPCL gained as much as 4.89% to hit an intraday high of ₹637.05 apiece. The stock closed at ₹635 apiece.

IOCL also saw a positive trend, with a 3.34% increase during the intraday trade. Its shares closed at ₹173.10 apiece on the NSE, after hitting an intraday high of ₹174.6 apiece.

The rally in state-owned OMC stocks was seen following three consecutive days of declining crude oil prices until Wednesday, May 1. This comes on the back of growing optimism regarding a potential ceasefire agreement in the Middle East between Israel and Hamas, with a renewed push led by Egypt.

Additionally, the rise in crude inventories and production within the US, the world’s largest oil consumer, further contributed to the downward trajectory of oil prices. Brent oil prices dipped below $84 per barrel. This dip comes after Brent oil prices reached the $90-mark in April 2024, the highest level since October 2023. The prices remained elevated due to concerns about supply disruptions stemming from geopolitical tensions in the Middle East.

A decrease in Brent crude prices is advantageous for oil marketing companies as it reduces their input costs. This provides them with greater flexibility to maintain competitive prices, ultimately boosting their margins.