PSU OMCs gain as crude oil prices extend losses

Shares of two public sector oil marketing companies rose by 1.1% to 1.61% at 15:25 IST on BSE as crude oil prices extended losses.

Meanwhile, the BSE Sensex was down 23.50 points, or 0.09%, to 26,789.92.

Among PSU OMCs, Indian Oil Corporation (IOCL) (up 1.61%) and HPCL (up 1.1%) edged higher. BPCL declined 0.32%.

Shares of BPCL had outperformed the market over the past one month till 4 June 2015, gaining 10.41% compared with 2.46% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 12.53% as against Sensex's 8.74% fall.

Shares of HPCL had outperformed the market over the past one month till 4 June 2015, gaining 7.76% compared with 2.46% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 6.44% as against Sensex's 8.74% fall.

Shares of IOCL had underperformed the market over the past one month till 4 June 2015, dropping 3.99% compared with 2.46% decline in the Sensex. The scrip had however outperformed the market in past one quarter, gaining 2.7% as against Sensex's 8.74% fall.

In global commodity markets, Brent crude oil futures edged lower on concerns that the oil producing countries' club will fail to cut output targets in an effort to support prices. Brent for July settlement was off 20 cents at $61.83 a barrel. The contract had lost $1.77 a barrel or 2.77% to settle at $62.03 a barrel during the previous trading session.

Oil cartel OPEC is expected to keep its production target of 30 million barrels of oil per day unchanged at a meeting scheduled in Vienna today, 5 June 2015. The OPEC meeting is being closely watched for clues about the organization's next moves.

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.

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