A lower oil import price acts as a positive trigger for the OMCs and improves their margins.
Crude oil prices fell on Wednesday to their lowest in over three months, after industry data showed a steep build in US crude supplies, while mixed Chinese economic data raised worries about global demand for crude, a Reuters report said.
Brent crude futures were trading at $81.66, up by $0.050 or 0.060% around this time while the US WTI oil futures were at $77.240, lower by $0.130 or 0.17%.
Even as the benchmark indices Nifty50 and S&P BSE Sensex were trading flat, the Nifty Oil & Gas was up by 48.35 points or 0.61% at 7,973.45. In the 15-stock index, 8 were trading in the green, six in the red while 1 remained unchanged.
Among the losers were national explorer Oil & Natural Gas Commission (ONGC), Petronet LNG, Indraprastha Gas Limited (IGL) which fell up to 0.47%.
US crude oil stocks rose by almost 12 million barrels last week, the Reuters report said, quoting market sources and citing American Petroleum Institute figures. Crude oil production in the United States this year will rise by slightly less than previously expected while demand will fall, the EIA said on Tuesday.The EIA now expects total petroleum consumption in the country to fall by 300,000 bpd this year, reversing its earlier forecast of a 100,000 bpd increase. The US Energy Information Administration (EIA) will delay the release of weekly inventory data until the week of November 13, the report said further.
Meanwhile, data in China, the world’s biggest consumer of oil, also raised doubts about the demand outlook, the report said adding that the crude oil imports by the world’s second-biggest economy in October showed robust growth but its total exports of goods and services contracted at a quicker pace than expected, adding to fears of lower global energy demand.
Adding to pressure on oil prices was a modest recovery in the US dollar from recent lows, which makes oil more expensive for holders of other currencies.
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