Oil & Gas Stocks in Focus as Crude Prices Drop Below $60

Oil & Gas stocks are in focus on Monday as Brent crude oil prices hover near $60 per barrel, while US WTI crude has fallen below this level. This decline in crude prices is expected to impact Indian companies involved in refining and petroleum product manufacturing.

Why Are Crude Prices Falling?

Crude oil prices have dropped due to concerns over global trade tensions. The tariffs imposed by US President Donald Trump on trade partners could reduce oil demand, potentially leading to a prolonged price decline. The ongoing trade war may push economies toward a slowdown, increasing fears of a recession.

Kristalina Georgieva, Chief of the  IMF (International Monetary Fund), highlighted that these tariffs pose a risk to global economic growth. She urged the US and its trade partners to find a resolution to ease uncertainty.

Impact on Indian Oil & Gas Companies

Indian oil & gas companies, including Reliance Industries, ONGC, Oil India, Indian Oil Corporation, and Bharat Petroleum, are expected to remain in focus today due to crude price movements.

On Friday, shares of major oil & gas firms saw significant losses:

• Reliance Industries share price fell 3.5% 
• ONGC share price dropped over 7% 
• Oil India share price declined 6.8% 
• Bharat Petroleum share price lost 2.3% 

The Nifty Oil & Gas index declined 3.78% in the last session, losing nearly 4% in a week. However, the index has gained 3.5% over the last month but has dropped 5.5% in the past three months.

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OPEC+ Supply Increase Adds to Pressure

Adding to crude’s weakness, OPEC+ unexpectedly decided to increase oil production by 411,000 barrels per day from May, much higher than the previously planned 135,000 barrels. This rise in supply, along with reduced global demand due to trade tensions, is keeping crude oil prices under pressure.

Conclusion

With crude oil prices under pressure from rising supply and weak demand, oil & gas stocks may remain volatile. Investors will closely watch further developments in global trade policies and OPEC+ decisions.

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