Oil-related stocks in focus as crude oil prices tumble; ONGC declines 4%

Shares of oil & gas, paints, aviation, and tyre companies were trading actively on the BSE on Wednesday as the crude oil prices tumbled after Saudi Arabia cut its October selling prices and Covid-19 cases rebounded in many countries. The rebound in Covid-19 cases could weaken the global economic recovery and sap fuel demand. 

At 09:39 AM, the S&P BSE Oil & Gas index was trading over 1 per cent lower at 12,728 levels. Oil marketing companies (OMCs) such as Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and Indian Oil Corporation (IOC) declined up to 2 per cent during the trade. Oil exploration and distribution firm Oil and Natural Gas Corporation (ONGC) was trading 4 per cent lower at Rs 71.50 levels. GAIL India, too, was trading around 3 per cent lower at Rs 91.75. 

Other stocks such as Castrol India, Indraprastha Gas (IGL), Petronet LNG, too, were trading with up to 2.5 per cent cuts. 

Among aviation stocks, IndiGo was down over 0.5 per cent at Rs 1,243.50 while SpiceJet was down over 2 per cent to Rs 50.50. 

Paint stocks, on the other hand, were trading in the green. For instance, Asian Paints was up over 1 per cent at Rs 1,979.70 while Kansai Nerolac was trading over 2 per cent higher at Rs 493. Berger Paints was flat with a positive bias. Crude oil derivatives are one of the key raw materials for paint manufacturers. Hence, a drop in crude oil is positive for these companies. 

Tyre stocks, however, were trading in the red. Apollo Tyres was down over 1 per cent at Rs 112 and JK Tyre & Industries was trading at Rs 56.90, down 1.4 per cent. MRF was down nearly 0.5 per cent at Rs 57,940.90.  

Oil futures fell sharply on Tuesday, with Brent tumbling below $40 a barrel for the first time since June. The prices extended their fall on Wednesday. At 09:47 AM, the WTI crude oil was trading 1.22 per cent lower at $36.31/ barrel while Brent Crude stood at $39.42 / barrel, down 0.9 per cent, Bloomberg data showed.