Oil prices went for a toss on Monday after Iran and six world powers agreed in a deal that Iran would curb its nuclear programme. The development provided a fillip for global economic growth and supported share prices around the globe.
The deal signed, looses the noose around Iran, which will find some relief from crippling sanctions imposed by US-led western powers to reign in Tehran’s nuclear programme.
The treaty is being dubbed a major step towards a lasting treaty. While Iran will not be allowed to increase its oil sales for six months, any easing of Middle East tensions tends to lead to lower crude prices.
Brent crude oil shed $2.89 to $108.16 a barrel, its biggest daily drop in a month, on the development. US oil lost $1.37 to $93.47 a barrel.
In light of the above development, stocks of oil & gas sector in India rose by more than 1% on Monday, outperforming the benchmark indices, as the price of Brent crude fell by more than $2 per barrel.
Oil prices fell as Iran and the world powers signed a landmark nuclear deal over the weekend. The BSE oil & gas sector index was up 1.4%.
Analysts said that the drop in oil prices would help in bringing down the current account deficit and also help in keeping inflation under control.
The rise in oil stocks was led by BPCL, which was up 4.5%, followed by Reliance Industries which was up 2.8%. Indian Oil was up 2.7%.
So, should you invest in oil & gas stocks? Kunal Bothra, Technical Analyst at LKP Securities tells Manu Kaushik what oil & gas stocks to buy at levels.
SmartInvestor : Kunal, market is at it once again. How long is this rally likely to last. Is it ok to buy into frontline stocks at current levels and what are the key levels to watch on Sensex and Nifty?
Kunal Bothra : Yes, I think after struggling below the 50 DMA for 2 days, Nifty is back above it. Short term trend is positive now, and with that timeframe in view, we believe one could look at building short term long positions.
Kunal Bothra : For Nifty, the support level is at 5970 with resistance at 6180, and Sensex support level is at 20200 and resistance at 20700
SmartInvestor : Oil shares are in focus today after Iran N-agreement reached. Is it advisable to invest in some oil marketing company stocks. What do charts suggest?
