BPCL, HPCL, IOC Rise Up to 4% as Crude Oil Prices Fall Sharply

Shares of oil marketing companies (OMCs) BPCL, HPCL and Indian Oil Corporation (IOC) climbed up to 4% on Friday, January 16. The stocks recovered from recent losses as falling global crude oil prices lifted investor sentiment.

During intra-day trade, HPCL rose nearly 3.7%, BPCL gained about 3%, and IOC advanced around 2%.

Crude Oil Prices Drop Sharply

Global crude oil prices witnessed a sharp fall after concerns over Middle East tensions eased. The chances of a US strike on Iran reduced, lowering fears of supply disruption.

• Brent crude fell over 4% to around $63.76 per barrel
• WTI crude declined nearly 4.6% to about $59.19 per barrel

The drop came after crude prices had climbed to multi-month highs earlier in the week due to geopolitical worries.

Why Lower Crude Prices Help OMCs

A fall in crude oil prices generally benefits oil marketing companies because crude is their main input cost. Lower crude prices reduce refining and production expenses.

If fuel prices at the pump are not cut immediately, OMCs can earn higher marketing margins, which improves profitability.

Better Cash Flow and Inventory Gains

Cheaper crude also helps reduce working capital needs and improves cash flow for OMCs. In addition, companies holding inventory purchased at lower prices may book inventory gains if fuel prices remain stable.

Lower crude prices also ease India’s oil import bill, which further supports the sector.

Also Read: Groww Share Price in Focus: State Street to Invest ₹580 Crore in Groww AMC!

Conclusion

BPCL, HPCL and IOC stocks rose sharply as falling crude oil prices improved the outlook for oil marketing companies. With easing global tensions and lower input costs, OMCs may see better margins and cash flows in the near term, supporting investor confidence.

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