PSU OMCs gain as crude oil prices drop

Shares of three public sector oil marketing companies rose by 0.39% to 2.06% at 11:33 IST on BSE after crude oil prices declined sharply yesterday, 12 October 2015.

BPCL (up 2.06%), HPCL (up 1.26%) and Indian Oil Corporation (up 0.39%) edged higher.

Meanwhile, the S&P BSE Sensex was down 86.53 points, or 0.32% at 26,817.58

Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already decontrolled pricing of petrol and diesel.

In global commodities markets, Brent for November settlement was currently up 31 cents at $50.17 a barrel. The contract had slumped $2.79 a barrel or 5.29% to settle at $49.86 a barrel during the previous trading session after a report showed that members of the Organization of the Petroleum Exporting Countries continued to boost production. The Brent November contract is to expire on 15 October 2015. Brent for December settlement was currently up 31 cents at $50.56 a barrel.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 65.02, compared with closing of 64.755 during the previous trading session.

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