ONGC, Oil India shares slip up to 6% on falling crude prices. Here is what analysts say
ONGC and Oil India (OIL) dropped by 3% to Rs 287.30 and 6.4% to Rs 570, respectively, on BSE following a sharp decline in crude oil prices, which usually negatively impacts their profit margins.
Crude oil prices have plummeted to nearly three-year lows following a downward revision of demand forecasts by OPEC, primarily driven by reduced Chinese demand. In its monthly report released yesterday, OPEC lowered the global oil demand forecast for 2024 to 2.03 million barrels per day, down from the previous estimate of 2.11 million barrels per day.
Chinese demand growth was also revised downwards to 650,000 barrels per day, compared to 700,000 barrels per day in the previous report.
Crude prices bounced on Wednesday as concerns about Tropical Storm Francine disrupting the supply of oil outweighed worries about demand.
“Crude oil prices below $70 per barrel for a long period can hurt the earnings of upstream companies, and hence we are witnessing selling pressure in upstream companies today,” said Sunny Agrawal, Head of the Retail Fundamental Desk at SBI Securities.
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