ONGC share price rises more than 7%, scales 52 week highs; Should you Buy, Sell or Hold the stock?

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ONGC (Oil and Natural Gas Corporation ) share price rose more than 5% during the intraday trades on Monday as it scaled 52-week highs. The stock was amongst the largest gainers in the Nifty-50 stocks.

The rising Crude oil prices are likely to have lifted investor sentiments. The Brent Crude oil that had dipped to close to $75 a barrel levels at start of January have risen to around $82 a barrel levels.

The Houthis attacks on oil tankers in red sea have contributed to almost 9% rise in Brent prices recently on fears of supply disruption thus leading to an improvement in investor sentiments for up stream oil and Gas producers as ONGC. Brent crude prices had averaged at $83.7 a barrel in 3QFY24, down 3.4% sequentially, as demand concerns continued to overshadow the impact of supply cuts by OPEC plus countries.

Analysts however had expected the crude prices to remain at $80-85 a barrel levels in 2024. Also Read- Adani Power shares surge 5% as Q3 net profit sees multi-fold jump Analysts at Motilal Oswal Financial Securities already had said that they expect Brent prices to remain at $85 a barrel during FY25-26 as global oil and oil product inventories stand at the lower end of the last five-year average and as production cuts by OPEC plus are expected to continue through CY24 The movement in Crude prices though may have impact on investor sentiments, however the rise in Crude prices is unlikely to improve ONGC's net realisations meaningfully since government keeps on adjusting windfall tax of crude oil every fortnight.

The rise in crude prices means that government will raise wind fall taxes on Oil and this mean that ONGC net realisations may remain close to $70-75 a barrel levels , as per analysts. For instance the