Oil marketing companies stock jump as crude oil prices reduces, Check the details 

Cooling crude oil prices sent the shares of major oil marketing companies (OMC) higher. Shares of state-run OMCs like Indian Oil, Bharat Petroleum and Hindustan Petroleum appreciated to the tune of 5%, a day after international crude oil prices used to their lowest levels recorded in more than a year. Brent crude and US WTI crude oil prices fell around 5% each to $73.7 per barrel and $67.6 per barrel respectively. 

The fall in crude oil prices came amid concerns about the contagion in the world’s financial system after the sudden collapse of the US-based Silicon Valley Bank (SVB). According to analysts, turmoil in major financial companies may send the world economy into a recession, affecting global demand. This may have led to a fall in prices. 

Falling prices of crude oil are beneficial for India as it imports a major chunk of its requirement. Oil prices quoted at their lowest level in more than a year. 

Analysts expect that declining crude oil prices could help in the improvement of marketing margins of OMCs. ICICI Securities said that according to their estimates, OMCs have a marketing margin of around ₹ 3 per litre on diesel, ₹ 6/per litre on Petrol and ₹ 4/litre on a blended basis. 

Meanwhile, analysts at Prabhudas Lilldher believe that OMCs are all well placed to benefit from improving marketing situation and healthy refining profitability. 

Shares of BPCL gained 6.02% and closed at ₹ 350.20 apiece, HPCL closed 6.53% higher at ₹ 245.40 apiece and Indian oil climbed 1.91% and closed at 80.10 apiece on Thursday. 

Written by Simran Bafna