Oil stocks stay afloat even as Sensex sinks

Falling crude prices helped shares of public sector oil companies outperform the broader markets this morning, with smart gains amid an over 350-point plunge in the benchmark Sensex.

Stocks like Indian Oil, BPCL and HPCL were trading higher, while exploration and production giant ONGC was among the best performers in the 30-share Sensex pack.

IOC was up 1.8% at Rs 317.4, BPCL rose 1.4% to Rs 688.35 and HPCL gained 1.6% to Rs 385.

ONGC was also trading 0.5% higher at Rs 277.10 after paring some of its early morning gains. In comparison, the Sensex was down by nearly 2%.

Among other oil and gas stocks, Gail, Oil India and Petronet LNG were also trading with gains.

Brokers said that the oil marketing companies were up as falling crude prices could help reduce their under-recoveries from the sale of diesel and other fuel.

Crude oil prices extended their fall today on concerns that energy demand could be hit hard if the global economy, especially the US, moves back into a recession.

Nymex crude prices fell below $80 per barrel in early Asian trade, while Brent North Sea crude prices were also down at near $106 per barrel.