Oil India rallies to 8-year high, nears fresh peak as crude price rebounds

Thus far in the calendar year, the stock price of OIL has rallied 51 per cent as compared to a 7.4 per cent rise in the S&P BSE Sensex

The stock price of Oil India (OIL) surged 8 per cent on the BSE to touch Rs 318.25 on Monday, its highest level in over eight years, as crude oil prices saw a sharp rebound sparked by the Israeli-Palestinian war over the weekend.

The rally was accompanied by heavy volumes in an otherwise weak market. The average trading volumes on the counter nearly doubled today. A combined 7.6 million equity shares had changed hands on the NSE and BSE.
The stock of the state-owned oil exploration & production company was quoting near its all-time high price of Rs 334.98 touched on September 9, 2014. In comparison, the S&P BSE Sensex was down 0.45 per cent at 65,702 at 11:13 AM.

Brent crude surged more than 4 per cent following Palestinian militant group Hamas’ surprise attack on Israel on Saturday, which is deemed to be the bloodiest in decades. The attack threatened to inflame tensions in the Middle East, home to almost a third of global oil supply, Bloomberg reported. CLICK HERE FOR FULL REPORT

So far in the calendar year, the stock price of OIL has rallied 51 per cent as compared to a 7.4 per cent rise in the S&P BSE Sensex.

The public sector energy producer is expecting a series of new wells and gas fields to go into production in Assam and Rajasthan soon. This development will enable the company to achieve a crude oil production of 3.8 million tonnes (mt) in the current year, said Chairman and Managing Director (CMD) Ranjit Rath.

This new target represents a 20 per cent increase over the 3.18 mt of oil produced in 2022-23 (FY23).

In terms of drilling, OIL plans to drill up to 60 new wells in FY24, up from 45 in FY23 and 38 in 2021-22. To support this increased drilling activity, the company has awarded contracts for two additional drilling rigs and extended the engagement tenure for existing rigs.

In its FY23 annual report said, the company said it has undertaken measures for engagement of Production Enhancement Contracts, adaptation of new technologies, maximizing recovery from existing fields, expedite development plans, monetization of Non-Producing PMLs and un-monetized discoveries etc. for enhancing oil and gas production.

According to analysts at ICICI Securities, OIL’s prospects remain strong over FY24E / FY25E driven by steady increase in oil & gas output (4 per cent annual growth), greater monetization opportunities in gas via the imminent Northeast (NE) grid commissioning, resumption of Numaligarh Refinery Limited (NRL) operations from Q2, and steady realizations for both oil & gas.