PSU OMCs gain as crude oil trades at six-week low

Shares of three public sector oil marketing firms rose 0.99% to 2.49% at 12:49 IST on BSE as US crude oil futures traded near the lowest level in six weeks after data showed US crude stockpiles increased more than forecast.

BPCL (up 2.49% at Rs 324.95), Indian Oil Corporation (up 1.76% at Rs 198.95) and HPCL (up 0.99% at Rs 219.25) edged higher.

Meanwhile, the S&P BSE Sensex was down 41.10 points or 0.2% at 20,688.28.

US crude oil futures for February 2014 delivery were up 37 cents a barrel at $92.70 a barrel in the electronic trading today, 9 January 2014. The contract had fallen $1.34 a barrel or 1.43% to settle at $92.33 a barrel on the New York Mercantile Exchange on Wednesday, 8 January 2014, its lowest closing level since 27 November 2013.

US crude inventories shrank by 2.68 million barrels to 357.9 million, a sixth weekly loss, according to the EIA, the US Energy Department's statistical arm.

United States is the world's biggest oil consumer.

Lower crude oil price will decrease under-recovery of PSU OMCs on domestic sales of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.

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