PSU OMCs rally as crude oil eases

Shares of state-run oil marketing companies rose 0.58% to 2.74% after weakening crude oil prices in the international commodity market.

Bharat Petroleum Corporation (BPCL) (up 2.74%), Indian Oil Corporation (IOCL) (up 1.61%) and Hindustan Petroleum Corporation (HPCL) (up 0.58%) advanced.

Meanwhile, the S&P BSE Sensex was up 21.96 points or 0.06% at 39,757.49.

In the commodities market, Brent crude for April 2020 settlement was down 38 cents at $56.24 a barrel. The contract fell 71 cents, or 1.24% to settle at $56.62 a barrel in the previous trading session.

Lower crude oil prices could reduce under-recoveries of public sector 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.

Brent crude prices dragged its falling trend as break-out of coronavirus continues to haunt global investors. China is one of the largest importers of oil. The Chinese tourism industries and transportation industry have received a major hit due to widespread impact of the mysterious virus. Air routes and supply chains with China have been disrupted in a bid to control the contagious nature of the virus.

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