Shares of Oil Market Companies (OMCs) rose on Tuesday as prices of International Brent crude oil futures fell marginally from its 2019 highs amid global economic growth concerns.
Accordingly, shares of Bharat Petroleum Corporation (BPCL)
climbed 3%, while those of Hindustan Petroleum Corporation (HPCL)
and Indian Oil Corporation
rose 2% each.
Crude oil prices dropped slightly on uncertainty regarding the US-China trade talks as well as longevity of supply outage in Saudi Arabia. Talks regarding the trade conflicts between the US and China are progressing, however, there has been no concrete announcement yet, while there is a possibility that the US may extend the March 01 deadline.
Further, tensions between the US and the European Union also fuelled demand concerns. Tensions between the two arose after EU vowed prompt retaliation if the US imposes tariffs on imported vehicles.
Additionally, on the supply side, there is not much clarity on how long the supply disruption in Saudi will continue. OPEC has achieved ~70% compliance with production cut deal that will run from January to June.