Oil explorers gain, tracking surge in oil prices

Reuters Market Eye - Crude oil explorers gain, tracking surging oil prices on escalating violence in Iraq on hopes of margin expansion and inventory gains, investors say.

Oil India Ltd is up 1.4 percent, Oil and Natural Gas Corp gains 1.5 percent, while Cairn India is up 1.7 percent.

Brent crude futures held near $113 per barrel on Tuesday as concerns over oil supply persisted, with the United States considering air strikes in Iraq amid a worsening security situation in the key oil producing country.

Also, traders point out that shares of ONGC and Oil India are pricing in a scenario where 90 percent of the subsidy burden would be borne by them. However, the expected reforms such as reduction in diesel subsidy could bring down the subsidy burden on these companies.

(Reporting by Abhishek Vishnoi)