ONGC Shares Dip 3% as Brent Crude Hits 5-Month Low, Impacting Oil Companies

7 Dec 2023 , 12:32 PM

ONGC shares dropped 3% in early trade on December 7 due to a significant fall in Brent crude prices to five-month lows.

Brent crude prices have fallen by 11% in the last five sessions, dropping below $75 a barrel, primarily driven by a surge in US gasoline inventories and concerns over sluggish demand.

Upstream oil companies like ONGC are adversely affected by declining crude prices as it reduces their refining margins. Other oil refiners such as Oil India and Hindustan Oil Exploration Company also faced losses in the current trading session.

At the time of writing, ONGC shares were trading 2.2% lower at Rs 127.55 on the National Stock Exchange.

Despite the recent setback, ONGC reported a 142% year-on-year surge in consolidated net profit for the July-September period, benefiting from a gradual increase in crude prices over the quarter.

The sharp increase in bottom line occurred despite a 12.9% decline in revenue from operations during the quarter, reaching Rs 1.46 lakh crore compared to Rs 1.68 lakh crore in the corresponding period.

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