OMC stocks unlikely to move into a long-term bull market

Share prices for the 3 PSU stocks plummeted through the April-October period. There is now a rebound. In the past 30 days, BPCL is up 18%, HPCL is up 15% and IOC is up 6.5%

Devangshu Datta

The reversal in crude prices over the past three weeks has altered trading equations. In October, the Indian crude basket, a combination of Oman, Dubai and Brent, cost $80/ barrel according to the Ministry of Petroleum & Natural Gas. The average cost of the basket between April-October was $74.61 a barrel. The average cost through financial year 2017-18 was $56.4.  One rule of thumb is that every $1 increase in crude prices leads to Rs 105 billion increase in India’s import bill. Every hike also hits the margins of the marketing and refining sector. The major private ...