Oil marketing companies' stocks slip up to 5% intraday on higher crude oil price, dollar index – BPCL, HPCL each hit 52-week lows

Oil marketing companies’ (OMCs) shares were plunged up to 5 per cent on the BSE intraday during Tuesday’s trading session. The decline is mainly on the two factors, higher crude oil prices and the dollar index hitting a 4-week high of 105 levels. 

Individually, Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) each hit their 52-week lows on Tuesday and down by around 2 and 5 per cent to Rs 311.85 and Rs 215.9 per share on the BSE intraday, respectively. 

 While Indian Oil Corporation Limited shares were down nearly 3 per cent to Rs 110.65 per share, trading near its 52-week low intraday on the BSE. In comparison, the BSE Sensex slipped marginally by 0.1 per cent at around 01:55 PM. 

Crude oil prices rose on Monday in a session of volatile trade, as tight global supplies outweighed worries that demand would be pressured by a flare-up in COVID-19 cases in Beijing and more interest rate hikes, according to a Reuters report.  

The US dollar stood just below a 20-year peak on Tuesday and just about everything else nursed losses as investors braced for aggressive Federal Reserve rate hikes and a possible recession, another Reuters report mentioned. 

The March quarter earnings of IOCL/BPCL/HPCL declined by 42%/46%/41% year-on-year due to huge marketing loss given negative auto fuel marketing margin on non-revision of petrol/diesel retail price, a domestic brokerage firm Sharekhan said in its review report 

The weak marketing performance was somewhat offset by a strong GRM of $18.5/$15.3/$12.5 per bbl for IOCL/BPCL/HPCL as compared to $7.9/bbl for Singapore complex GRMs, the brokerage said.  

Elevated oil prices continue to pose a risk to diesel/ petrol marketing margins and are a cause of concern for OMCs, the brokerage also noted further.