Why Are HPCL, BPCL, IOC And Other OMC Stocks Falling Today? What Should Investors Do?

OMC Stocks Today: Shares of oil marketing companies (OMCs) such as HPCL, BPCL, and IOC came under pressure on Thursday after a sharp spike in global crude oil prices.

HPCL fell over 4.6% to Rs 395.25, BPCL dropped 3.6% to Rs 321.80, and IOC declined 1.38% to Rs 143.15. Other related stocks like GAIL, IGL, and ATGL also saw losses.

In contrast, oil producers such as Oil India and ONGC gained 1.74% and 0.91%, respectively, as higher crude prices benefit upstream companies.

Why Oil Stocks Are Falling?

The pressure on OMC stocks follows a sudden surge in crude oil prices a day earlier, when Brent and WTI jumped over 4% to their highest levels since early April. The spike was triggered by rising geopolitical tensions in the Middle East.

US President Donald Trump said the region "could be a dangerous place" and confirmed that American personnel were being moved from the Middle East. He also warned that the US would not allow Iran to acquire a nuclear weapon.

These developments came as the US prepared for a partial evacuation of its Iraqi embassy and authorized voluntary departures from countries like Bahrain and Kuwait due to heightened security risks. The State Department also updated its global travel advisory, citing regional tensions.

Talks between the US and Iran over the latter’s nuclear program are expected to take place on Sunday, adding to the uncertainty.

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What Should Investors Do?

Nilesh Jain, Vice President and Head of Technical and Derivatives Research at Centrum Broking, said OMC stocks are feeling the pressure due to the sharp rise in crude. “OMC stocks, surely from a trading point of view, may see some sideways to negative bias,” he noted.

However, Jain added that “we are also witnessing some bit of recovery from the lower levels in OMC stocks,” which could offer opportunities for long-term investors.

“If we see any meaningful decline further from here, that can be a good opportunity to accumulate as a positional bet. So, for investors, this looks good. There is a trade on decline that can be bought,” he explained.

Jain named IOC as the preferred stock in the OMC space. “IOC looks competitively better and we are expecting a follow-up move towards Rs 155 to Rs 160. Rs 137 is a very good support for this particular stock,” he said.

While short-term volatility and selling pressure may persist, Jain assured that “for investors, there is nothing to worry.”

Oil Price Futures

Oil futures remained volatile on Thursday after a sharp rally in the previous session. Brent crude futures, which had surged more than 4% on Wednesday, were down 30 cents or 0.4% at $69.47 per barrel in early Asian trade. U.S. West Texas Intermediate (WTI) crude also slipped 23 cents or 0.3% to $67.92 per barrel. 

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