Shares of ONGC declined to the day’s low of Rs 309.2, with a fall of 4.2% whereas Chennai Petroleum Company shares dropped 5% to a low of Rs 933.3.
The shares of GAIL and Oil India additionally witnessed a decline of as much as 2%.
Crude oil costs continued to slip on Wednesday, with US crude futures falling over 0.5%, following a greater than 4% drop on Tuesday. This decline was pushed by indicators of a possible decision to a dispute affecting Libyan crude manufacturing and exports. Brent crude additionally skilled a pointy 4.9% drop on Tuesday and was down an extra 0.6% on Wednesday.
The autumn in oil shares aligns with broader market sentiment, with headline indices Nifty and Sensex buying and selling round 0.5% decrease at 11:40 am. The drop in crude oil costs negatively impacts oil drilling shares like ONGC and Oil India, squeezing their revenue margins.Additionally Learn: Buyers lose Rs 3 lakh cr as Sensex slumps 500 pts. Prime 4 elements behind the selloff
International brokerage Emkay acknowledged, “Issues round oil demand are prone to dominate the narrative, finally pulling costs in direction of the $70 degree. The slowdown in demand, notably from non-OECD international locations like China, the place oil consumption has been shrinking since early 2024, presents vital headwinds.”
Emkay additionally famous that OPEC’s means to implement provide cuts has diminished as its share of worldwide oil manufacturing has dropped from practically 60% in 2012 to 49% in H1CY25. “It is rational to imagine OPEC could shift to defending market share, probably resulting in additional value declines,” Emkay added.
Moreover, expectations of elevated OPEC+ manufacturing beginning in October, supposed to offset the decline in Libyan output, add strain to grease costs. In keeping with media reviews, OPEC+ plans to spice up oil output by 180,000 barrels per day in October, as a part of a technique to regularly reverse current manufacturing cuts whereas sustaining some reductions till the tip of 2025.
(Disclaimer: Suggestions, recommendations, views and opinions given by the specialists are their very own. These don’t characterize the views of the Financial Instances)