Crude Oil slumps 6%; ONGC, Oil India, Adani Total tumble up to 17%

Shares of energy companies were under pressure falling by up to 17 per cent on the BSE in Monday’s trade after oil prices tumbled about 5 per cent to a three-week low on Friday, as investors feared that interest rate hikes from major central banks could slow the global economy and cut demand for energy.

Mangalore Refinery & Petrochemicals tanked 17 per cent to Rs 78.55, while Chennai Petroleum Corporation tumbled by 15 per cent to Rs 277.75 and Oil India plunged 8 per cent to Rs 233.40 on the BSE in intra-day trade. These stocks had seen sharp run-up on higher crude oil prices.

Oil and Natural Gas Corporation (ONGC), Goa Carbon, Adani Total Gas and Hindustan Oil Exploration were down in the range of 5 per cent to 7 per cent. As of 09:49 am; the S&P BSE Energy index was down 2.4 per cent as compared to 0.28 per cent decline in the S&P BSE Sensex. The energy index hit a multi-year low of 7,439.97 on the BSE in intra-day trade today.

Brent futures fell $5.85, or 4.9 per cent, to $113.96 a barrel by 11:02 a.m. EDT (1502 GMT). The US West Texas Intermediate (WTI) crude fell $6.66, or 5.7 per cent, to $110.93. Both were on track for their lowest closes since May 25.

Also pressuring prices, the US dollar this week rose to its highest since December 2002 against a basket of currencies. A stronger dollar makes oil more expensive for buyers using other currencies, the Reuters reported. CLICK HERE FOR REPORT

“Crude oil prices after the United States announced new sanctions on Iran, and as energy markets stayed focused on supply concerns that have sent prices soaring this year. The International Energy Agency said it expects demand to rise further in 2023, growing by more than 2 per cent to a record 101.6 million barrels per day. We expect crude oil prices to trade sideways to up with resistance at $121 per barrel with support at $115 per barrel,” Tapan Patel, Senior Analyst (Commodities), HDFC Securities said.