PSU OMCs extend gains as crude oil prices drop

Shares of three public sector oil marketing companies rose by 0.94% to 2.53% at 11:00 IST on BSE as global crude oil prices witnessed last two sessions of sharp losses post Britain's vote to exit European Union.

Meanwhile, the S&P BSE Sensex was up 68.68 points or 0.26% at 26,471.64.

BPCL (up 0.94%), Indian Oil Corporation (IOCL) (up 2.53%) and HPCL (up 1.43%) edged higher.

Crude oil futures edged higher after extending Friday, 24 June 2016's sharp losses in the previous session as investors scooped up beaten down prices after Britain's shock vote to exit the European Union. Brent for August 2016 settlement was currently up 71 cents at $47.87 a barrel. The Brent August contract had fallen $1.25 a barrel or 2.58% to settle at $47.16 a barrel yesterday, 27 June 2016. The Brent August contract had fallen $2.50 a barrel or 4.91% to settle at $48.41 a barrel on Friday, 24 June 2016.

Lower crude oil prices could decrease 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, the next revision of petrol, diesel, and jet fuel prices is due this weekend. PSU OMCs review petrol and diesel 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. PSU OMCs review jet fuel prices on the last day of the month based on the average imported oil price for the month.

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