Shares of oil refining companies like Reliance, IOC, BPCL and MRPL slumped on Tuesday as oil prices surged overnight to their highest since mid-2015, raising concerns about the inflation outlook and hitting domestic oil refiners.

Oil prices rose 3.5 per cent on Monday, the highest since early July 2015, as Saudi Arabia's crown prince cemented his power with an anti-corruption crackdown, while the US rig count fell and markets continued to tighten.

Brent crude futures were up 5 cents at $64.32 per barrel by 0750 GMT. On Monday, they had closed 3.5 per cent higher, also their biggest percentage gain in about six weeks.

US West Texas Intermediate (WTI) crude was down just 3 cents at $57.32 a barrel. The contract had surged 3 per cent on Monday, the biggest percentage gain since late September. Both benchmarks hit their highest since mid-2015 during the session.

The rise in oil prices is seen as likely to prevent the Reserve Bank of India from cutting interest rates anytime soon, even as economic growth has slowed to a three-year low - removing a potential trigger for markets.

RIL shares closed lower by 2.98 per cent at Rs 906.65, IOC (-2.51% at Rs 400.15), BPCL (-0.57% at Rs 521.75) and MRPL (-1.83% at Rs 131.20).

The spike in crude oil prices globally was attributed to the Saudi crown prince’s bid to tighten his grip on power and also flaring tension between the kingdom and Iran.

Besides, a pledge by the Organisation of the Petroleum Exporting Countries last week to keep trimming production till ‘normalcy’ returns also supported crude oil prices.

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