Oil companies in heavy demand at Dalal street today

Refiners Indian Oil Corp and Bharat Petroleum Corp were in heavy demand in late afternoon trade on Thursday as global crude oil prices slipped to fresh 6-1/2 year lows in international markets following record monthly output by Saudi Arabia and a rise in inventories in the US, both contributing to an existing global glut.

Brent Oil Futures slipped 30 cents at $46.86 a barrel, their lowest in February 2009 as a slowdown in China and a contraction of GDP in Japan fueled fears of a slowdown in demand.

A fall in crude oil prices helps local refiners such as Bharat Petroleum, Hindustan Petroleum and Indian Oil Corp to reduce their under-recoveries on the local sale of LPG and kerosene at controlled prices. Petrol and Diesel are already freely priced in India.

As a consequence, Indian Oil jumped 0.5 percent to 400 rupees. BPCL was up 1 percent to 898.80 rupees on the National Stock Exchange. The open interest of their futures was up between 1.9 to 5.4 percent as well. The gains are in contrast to a 1.5 percent fall in the main index Nifty.

(Image credits: Indiatimes)