PSU OMCs decline after recent surge in oil prices

Shares of two public sector oil marketing companies fell by 0.97% to 1.93% at 11:15 IST on BSE after global crude oil prices surged yesterday, 3 February 2015.

Meanwhile, the BSE Sensex was down 31.64 points, or 0.11%, to 28,968.50.

Among PSU OMCs, BPCL (down 0.97%) and HPCL (down 1.93%) edged lower.

Indian Oil Corporation rose 1.33%.

Brent crude oil futures edged lower as renewed concerns over global demand and high stock levels halted a rally that pushed up prices by about 19% over the past four sessions. Brent for March settlement was down 18 cents at $57.73 a barrel. The contract had jumped $3.16 a barrel or 5.8% to settle at $57.91 a barrel during the previous trading session.

The recent rebound in oil prices was driven by hopes that prices may have hit a bottom after a seven-month rout slashed oil futures by nearly 60% and prompted major energy firms to cut spending on new production.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.65, compared with its close of 61.68 during the previous trading session.

Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

Meanwhile, PSU OMCs cut petrol prices for the tenth time since August by Rs 2.42 to Rs 58.91 per litre in Delhi, while diesel prices were cut by Rs 2.21 to Rs 46.01, yesterday, 3 February 2015. The revised prices will take effect from 4 February 2015. PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.

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