Aviation stocks grounded on boiling crude oil prices

Two aviation stocks fell 3.17% to 3.69%, following a spurt in global crude oil prices.

Interglobe Aviation (down 3.17%) and SpiceJet (down 3.69%), edged lower.

Meanwhile, the S&P BSE Sensex was down 116.84 points or 0.31% at 37,268.15.

In the commodities market, Brent crude for November 2019 settlement was up $6.45 at $66.67 a barrel. The contract fell 16 cents or 0.26% to settle at $60.22 a barrel in the previous trading session on Friday.

Higher crude oil prices hurt aviation firms as jet fuel prices are directly linked to international crude oil prices. Jet fuel typically constitute over 40% of airlines' operating costs.

Media reported that the Tehran-backed Huthi rebels in Yemen claimed Saturday's strikes on two plants owned by state energy giant Saudi Aramco. The coordinated strikes on key Saudi Arabian oil facilities in Khurais and Abqaiq - the world's largest oil processing facility and crude oil stabilization plant - disrupted about half of the kingdom's oil capacity, or 5% of the daily global oil supply, the reports added.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia.

Saudi Energy Minister Prince Abdulaziz bin Salman was quoted by the media saying that 5.7 million barrels a day of crude oil and gas production have been affected. The latest OPEC figures put total Saudi production at 9.8 million barrels per day.

Last week on Thursday, OPEC agreed to trim oil output by asking over-producing members Iraq and Nigeria to bring production in line with their targets as the group strives to prevent a glut amid soaring U.S. production and a slowing global economy.

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