PSU OMCs rises after crude oil slides

Shares of state-run oil marketing companies rose 2.38% to 5.10 after crude oil prices declined in the international commodity market.

Meanwhile, the S&P BSE Sensex was up by 394.77 points, or 1.02% to 38,988.29.

HPCL (up 5.18%), Indian Oil Corporation (IOC) (up 3.63%) and BPCL (up 2.46%) advanced.

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 for December 2019 settlement was down 7 cents at $61.36 a barrel. The contract fell 69 cents a barrel or 1.11% to settle at $ 62.39 a barrel during the previous trading session.

Oil continued to correct amid media reports that Saudi Arabia was ahead of schedule in restoring its output capacity.

Last week, Brent crude oil prices surged over $69, following an attack on an oil processing plant and nearby oil field operated by Aramco in Saudi Arabia on Saturday. Aramco is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia. The strike forced the company to cut its output in half. That took 5.7 million barrels of crude out of daily circulation, or nearly 6% of worldwide consumption.

Meanwhile, a foreign brokerage has upgraded HPCL, IOC to 'Buy' and has maintained 'Neutral' on BPCL as it sees higher refining margin and range-bound crude prices in the medium-term.

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