Oil Companies are running well oiled. Know why

Oil marketing companies and several other stocks related to the global crude oil market reacted positively to news that oil-rich Iran and the six world powers were close to signing a deal on Tehran's nuclear plans.

Crude Oil futures slid 2 percent in an already over supplied global crude oil market soon after the broad contours of the deal were made public. A fall in prices of crude oil helps indian companies such as IOC, BPCL and HPCL to source cheaper oil from overseas. Iran was reeling under sanctions from western countries owing to its hidden pursuit of nuclear weapons.


Meanwhile, in futures trade, Indian Oil surged 3 percent to 439.75 rupees. Hindustan Petroleum jumped 3.6 percent to 853.80 rupees and Bharat Petroleum rose 2.3 percent to 930.65 rupees. All three stocks showed rise in open interest positions coupled with a gain on the stock price.

Stocks such as Global Offshore and Aban Offshore were also in an uptrend.

Sanction-hit Iran, the world's 4th largest producer, expects to nearly double its oil exports to nearly 2.3 million barrels per day in several months as restrictions on banking, selling of oil and payment gateways are eased to accommodate its business. This is good news for buyers such as India, Japan, China and South Korea.

(Image credit: Indiatimes)