Shares of four oil exploration and production (E&P) companies dropped 0.58% to 1.65% and shares of two PSU OMCs rose 0.1% to 0.47% at 12:30 IST on BSE after decline in global crude oil prices.
Meanwhile, the S&P BSE Sensex was down 7.19 points or 0.06% at 25,254.12.
Among shares of oil exploration and production (E&P) companies, ONGC (down 1.65%), Reliance Industries (RIL) (down 0.59%), Oil India (down 0.58%) and Cairn India (down 1.44%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
Among shares of public sector oil marketing companies (PSU OMCs), BPCL (up 0.1%) and Indian Oil Corporation (up 0.47%) gained. HPCL declined 0.4%. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
Crude oil prices fell in the global commodities markets after a media report suggested that Iran would continue increasing its oil production and exports until it reaches the market position it enjoyed before the imposition of sanctions. Brent for June settlement was currently down 40 cents at $38.27 a barrel. The contract had fallen $1.66 a barrel or 4.11% to settle at $38.67 a barrel during the previous trading session.
The world's major crude oil producers led by Russia and Saudi Arabia have convened a meeting on 17 April 2016 in Doha, Qatar to discuss measures to stabilise prices, including a proposal to freeze output.
The BSE Oil & Gas index had outperformed the market over the past one month till 1 April 2016, rising 7.68% compared with Sensex's 6.27% rise. The index had, however, underperformed the market in past one quarter, dropping 5.75% as against Sensex's 3.41% fall.
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