OMCs trade lower even as crude falls to lowest levels in four months

Shares of oil marketing companies (OMCs) gained focus in Tuesday’s trade (June 4) after previous day’s steep losses to the tune of 4 per cent in the oil prices, which fell to their 4-month low levels.

Shares of BPCL, HPCL and IOC in early morning deals traded with a cut of up to 2 per cent in line with the pressure seen on the headline indices as poll counting continues.

In early trade today, oil prices extended their fall as markets are pricing in a higher supply later in the year.

While OMCs will stand to gain the most from the development, the stock price reaction can be capped given the uncertainty on account of the election poll outcome due today.

Brent after falling below $80 per barrel on Monday for the first time since early February traded lower by 0.3 per cent at $78.16 per bbl.  US West Texas Intermediate (WTI) crude futures eased 17 cents, or 0.2% to $74.05. 

Experts recommedations on Oil and gas stocks

Shrikant Chouhan of Kotak Securities is of the view that oil and gas stocks will gain focus today. He recommends buying the BPCL shares for a target of Rs 700 with a stop loss at Rs 645.