The oil & gas index hit an intra-day high of 12,601, its highest level since January 18, 2008, on back of strong rally in stocks like Oil & Natural Gas Corporation (ONGC), Oil India and Indian Oil Corporation (IOC).
IOC hit a new high of Rs 354, up 3%, while Oil India touched a fresh 52-week high of Rs 469, up 3% on the BSE. ONGC, Castrol India, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) from the index were up in the range of 2% to 3%.
Oil edged higher on Wednesday on expectations that US crude oil inventories are falling and on signs that oil producers are willing to stick to agreed output cuts that came into effect this week, the Reuters report suggests. CLICK HERE TO READ FULL REPORT.
Crude oil prices have seen a jump from average of US$ 45.82/bbl in Q2FY17 to average of US$ 50.08/bbl in Q2FY17. On an end to end basis, crude prices have rallied from US$ 49.17/bbl to US$ 55.96/bbl currently.
“In rising crude oil environment, with refiners having 15 days to 1 month stock, they register inventory gains. These gains coupled with strong trend in crack spreads will result in higher gross refining margins (GRMs) for oil marketing companies (OMCs) during Q3FY17,” analyst at IIFL Wealth Asset Management said in a report.
H1FY17 performance of OMCs was hit by inventory losses and weakness in GRMs. However, during H2FY17, GRMs have moved up and companies are likely to report inventory gains. Furthermore, marketing volumes have seen an increase. These factors will result in substantial improvement in profitability of OMCs, added report.