By Admin 
Share Market Today: Shares of oil marketing companies (OMCs) like Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOC) will remain under pressure on Monday amid the ongoing conflict between Iran, US and Israel in the Middle East.
The upward trend may continue in upstream stocks like Oil and Natural Gas Corporation Limited (ONGC), GAIL and Oil India. Investors will keep their eyes on the shares of oil marketing companies today after Brent crude increased by 10 percent to $ 80 per barrel in over-the-counter trade.
Oil companies in profit
Brokerage Emkay Global says that this rise in oil prices can benefit upstream stocks like ONGC and Oil India. However, profits may reduce slightly due to windfall tax. In fact, due to increase in crude oil prices, the revenue of companies like ONGC and GAIL also increases.
These companies extract crude oil and gas from the ground and sell them in the international markets at prevailing prices. Now when oil becomes expensive worldwide, their selling price per barrel also increases. Companies also benefit because even if oil prices increase, there is no change in the expenses incurred on drilling and extracting it. Now when the costs remain the same and the selling price increases, profit is inevitable. According to experts, every $1 increase in the price of crude oil per barrel can increase the annual revenue of companies like ONGC and GAIL by Rs 300-400 crore.
Pressure on oil marketing companies
Brokerage firm JP Morgan said that higher oil prices are positive for upstream companies like ONGC, but negative for oil marketing companies like BPCL, IOCL and HPCL. Shares of oil marketing companies like BPCL, IOCL and HPCL will be under pressure today because if oil prices rise, then of course producing companies like ONGC and GAIL benefit. But marketing companies remain in loss because they buy crude oil at international prices, but since the prices of petrol and diesel in the country are often kept constant, they are not able to make profits.
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