Mumbai, June 17: Global crude oil prices have been on a steady decline, leading to a significant rise in shares of government oil marketing companies on Wednesday. Signs of easing geopolitical tensions have also contributed to this positive market movement.
During the trading day, shares of Hindustan Petroleum Corporation Limited (HPCL) surged over 2%, reaching a high of ₹410.50 on the Bombay Stock Exchange (BSE). Similarly, shares of Bharat Petroleum Corporation Limited (BPCL) climbed by 2.46%, hitting an intra-day high of ₹319.50. Indian Oil Corporation Limited (IOC) also saw a rise of 1.61%, with shares reaching ₹147.47.
This surge in oil marketing companies’ shares comes at a time when crude oil prices have fallen sharply. The market anticipates that a proposed agreement between the U.S. and Iran may lead to an increase in Iranian oil exports, alleviating supply concerns in the global market.
The price of international benchmark Brent crude has dipped below $80 per barrel, trading at its lowest level in three months. Recent trading sessions have shown a significant decline in prices. Meanwhile, U.S. West Texas Intermediate (WTI) crude oil also fell nearly 1%, trading around $75 per barrel.
Reports suggest that under an interim agreement, Iran may be allowed to resume crude oil sales. This deal could pave the way for broader negotiations aimed at resolving conflicts and addressing concerns related to Iran’s nuclear program.
Additionally, this proposed arrangement is expected to facilitate the complete reopening of the Strait of Hormuz, a crucial maritime route for global energy supply. Its reopening would ease the movement of commercial vessels in the region.
Market experts note that Brent crude prices have dropped nearly 16% in the past five days, now hovering around $79 per barrel. This decline has significantly alleviated concerns regarding India’s rising balance of payments (BOP) deficit.
Experts also highlight a positive market signal with a decrease in selling by foreign institutional investors (FIIs). This trend may continue as the Indian rupee strengthens, with further appreciation expected.
On Wednesday, reduced concerns over energy prices and a favorable outlook from global investors led to the domestic stock market showing gains for the fourth consecutive trading session, successfully closing in the green.
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