The Hindu Business Line : Oil stocks firm as crude prices fall

Some of the stocks that attracted market attention include ONGC (up 1.39 per cent at Rs 712.75 on BSE), IOC (up 3.13 per cent at Rs 408.35), Mangalore Refinery (up 5.82 per cent at Rs 43.65), Kochi Refinery (up 1.72 per cent at Rs 163.35), HPCL (up 2.60 per cent at Rs 315.40). Other smaller companies related to oil and gas sector were also up. In this list includes Aban Lloyd (an oil drilling company), Bongaigaon Refinery, and Hindustan Oil Exploration.

KRIS Research, Director, Mr Arun Kejriwal said, "Interest in oil stocks has revived due to fall in international oil prices." He said oil companies (especially oil marketing companies) were beaten down due to rise in international oil price. With oil prices easing, the margins are also expected to be better.

Mr Kejriwal said the statement of Finance Minister during the Union Budget that PSU companies would maintain high dividend payout is also attracting interest. According to analysts after the end of second quarter several oil PSUs are expected to announce interim dividend and the major beneficiary of this would be the government.

There has also been interest in oil refining companies as their margins have increased due to rise in international oil prices.

According to market analysts oil prices are expected to fall further over the next few weeks and they are likely to come below $40 per barrel. "If this price comes below $40, there will be further increase in oil companies shares."

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