Shares of three state-owned oil marketing companies extended losses for second straight session amid a spurt in crude oil prices.
Hindustan Petroleum Corporation (HPCL) slumped 4.28% to Rs 252.50. It has fallen 6.36% in two days from its close of Rs 269.65 recorded on 2 January 2019.
Indian Oil Corporation lost 1.69% to Rs 124.80. It has slipped 1.73% from its close of Rs 127 recorded on 2 January 2019.
Bharat Petroleum Corporation (BPCL) slipped 1.49% to Rs 474.95. It has corrected 2.56% from its close of Rs 487.45 recorded on 2 January 2019.
Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
In the commodities market, Brent crude for March 2020 settlement was up $1.62 a barrel, or 2.36% to $70.22 per barrel. The contract has hit its day's high at Rs 70.72, its highest intraday level since 28 May 2019.
The contract rose $2.35 or 3.5% to settle at $68.60 a barrel on Friday, 3 January 2020.
Brent crude futures spurted on Friday after a US air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.
India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). Higher crude prices also lead to a spike in domestic inflation.
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