PSU OMCs drop on surge in crude oil prices

Shares of three state-run oil marketing companies fell 0.89% to 2.53% at 11:39 IST on BSE amid surge in global crude oil prices in the wake of recent political developments in Saudi Arabia.

HPCL (down 2.53% at Rs 433.90), BPCL (down 1.84% at Rs 524) and Indian Oil Corporation (down 0.89% at Rs 408.60) edged lower.

Meanwhile, the S&P BSE Sensex was down 5.77 points or 0.02% at 33,679.79.

Oil prices hit their highest levels since July 2015 early today, 6 November 2017 as markets tightened, while Saudi Arabia's crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.

In the global commodities markets, Brent for January 2018 settlement was up 20 cents at $62.27 a barrel. The contract had surged $1.45 a barrel or 2.39% to settle at $62.07 a barrel during the previous trading session.

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

Additionally, a weak rupee will raise the cost of crude oil imports for PSU OMCs. In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 64.7325, compared with its close of 64.55 during the previous trading session.

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