Shares of four oil exploration and production companies fell by 0.68% to 3.37% at 13:55 IST on BSE as global crude oil prices continue to decline.
Meanwhile, the BSE Sensex was down 87.94 points, or 0.32%, to 27,514.07.
Among oil exploration and production companies, Cairn India (down 3.37%), Oil India (down 3.25%), ONGC (down 1.82%), and Reliance Industries (down 0.68%) edged lower.
Lower crude oil prices will result in lower realizations from crude sales for oil producers. Brent crude futures dropped on persistent concerns over a supply glut and a bearish demand outlook. Brent for January settlement was off 33 cents a barrel at $63.35 a barrel. The contract had lost 56 cents a barrel to settle at $63.68 during the previous trading session, its lowest closing level since 16 July 2009.
Meanwhile, shares of PSU gas distribution firm, GAIL (India) dropped 4.81%.
However, fall in oil prices is slated to reduce subsidy burden of ONGC, GAIL (India) and Oil India. ONGC, GAIL (India) and Oil India share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Powered by Capital Market - Live News