Oil Stocks In Focus: BPCL, HPCL, Indian Oil Gain As Crude Falls Over 8% In Three Days
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BPCL, HPCL and Indian Oil gain as Brent crude falls over 8% in three sessions, while aviation and paint stocks also rise.
Oil marketing companies, airlines and paint stocks moved higher in morning trade on Wednesday as crude oil prices extended their decline, with Brent falling more than 8% over the past three sessions.
The decline in crude prices boosted sentiment towards companies that use oil as a key input or benefit from lower fuel costs. BPCL was among the top movers, rising 2.5% to ₹322.15, while Hindustan Petroleum gained 2.2% to ₹377.
Indian Oil advanced 1.5% to ₹139.90, while Mahanagar Gas rose 1.5% to ₹1,118. Adani Total Gas and Petronet LNG also traded higher, gaining 2.2% and 1.1%, respectively.
In the aviation space, InterGlobe Aviation gained 1.1% to ₹5,246, while Asian Paints rose 1.4% to ₹2,657.
The gains came even as upstream oil producers moved in the opposite direction. ONGC and Oil India were among the stocks under pressure, reflecting the impact that lower crude realisations can have on oil producers.
Brent crude slips below $86 a barrel
Brent crude fell 2.5% on Wednesday to an intraday low of $85.01 a barrel, compared with $87.27 at the previous close. WTI crude was down 2.7% at $80.08 a barrel.
Brent has dropped from $92.67 a barrel at the close on August 21 to Wednesday's intraday low, marking a decline of more than 8% in three trading sessions.
Crude had surged to around $93 a barrel last week amid escalating tensions in West Asia. Prices have since retreated as the situation has shifted towards US sanctions on Iran and expectations of greater normalisation in trade through key maritime routes.
Why OMCs are gaining while upstream stocks fall
The impact of crude prices differs sharply across the energy value chain.
For companies such as BPCL, HPCL and Indian Oil, a decline in crude can lower the cost of their key input and potentially support margins, depending on product prices and the broader refining environment.
Upstream producers such as ONGC and Oil India, however, sell crude and therefore benefit from stronger realisations when international oil prices rise. A sustained decline in crude can put pressure on their revenue and profitability.
The impact also extends beyond the oil sector. Airlines such as IndiGo can benefit from lower aviation turbine fuel costs, while paint and tyre manufacturers can gain from softer prices for crude-linked raw materials.
Oil-linked stocks in focus
Aegis Logistics | ₹1,319 | +1.1% | -3.3% | -2.3% |
Adani Total Gas | ₹650 | +2.2% | -2% | -0.4% |
Asian Paints | ₹2,657 | +1.4% | +1% | +0.7% |
BPCL | ₹322.15 | +2.5% | +5% | +3.8% |
Hindustan Petroleum | ₹377 | +2.2% | +2.8% | -1% |
Indian Oil | ₹139.90 | +1.5% | +2.6% | +1% |
InterGlobe Aviation | ₹5,246 | +1.1% | +1% | +5.2% |
Mahanagar Gas | ₹1,118 | +1.5% | -0.8% | +3.8% |
Petronet LNG | ₹294 | +1.1% | +2.2% | +7.3% |
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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