PSU OMCs slide on rising crude oil prices

Shares of three state-run oil marketing companies fell by 0.52% to 1.24% at 10:18 IST on BSE after US crude oil futures hit a fresh four-month high on Tuesday, 18 February 2014.

Indian Oil Corporation (down 1.24%), BPCL (down 0.76%) and HPCL (down 0.52%), edged lower.

The S&P BSE Sensex was up 28.23 points, or 0.14% at 20,662.44.

US crude oil futures rose by over $2 a barrel on Tuesday, 18 February 2014, to hit a fresh four-month high as high demand and cold weather drove gasoline and heating oil prices higher. Brent crude oil rose to its highest level this year as Libyan output fell yet again, rebels in South Sudan seized control of the capital in a key oil-producing state and protests in Venezuela showed renewed instability.

In New York, US crude jumped $2.13, or 2.85%, to settle at $102.43 per barrel, its highest since 10 October 2013. Brent crude rose $1.28, or 1.17%, to settle at $110.46 per barrel, its highest settlement since 31 December 2013.

Meanwhile, brent crude held above $110 a barrel in Asian trading today, underpinned by geopolitical concerns in Africa and Venezuela, while US oil touched its highest in four months as stockpiles are forecast to fall on winter demand and new pipeline capacity.

In Asian trading today, US crude was up $2.41, or 2.40%, to $102.71 per barrel. Brent crude was down 29 cents, or 0.26%, to $110.17 per barrel.

Higher crude oil prices will increase under recoveries of PSU OMCs on domestic sale 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. The government has already freed pricing of petrol.

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