Shares of major oil producers Oil India, ONGC, Hindustan Oil Exploration Company Ltd and Antelopus Selan Energy Ltd crashed as crude prices retreated from recent highs during trading session on Wednesday.
Oil India prices slumped 11 percent to Rs Rs 423.25, while ONGC declined 2.91 per cent to Rs 251.55 on BSE. Hindustan Oil fell 4.86 per cent to Rs 174.10, whereas Antelopus dropped 4.99 per cent to Rs 810.
The decline in the stocks stems from the drop in the international crude oil prices. Brent crude was trading 48 cents or 0.52 per cent lower at $90.97 per barrel on Wednesday afternoon, while US benchmark West Texas Intermediate (WTI) remained below the $88-per-barrel mark.
According to analysts, gains on the oil prices erased as negotiations between Iran and US indicated truce following a brief military campaign against IRGC. Reports also revealed crude oil will be remain under pressure as China- the largest oil importer signaled a weaken demand despite a drop in trade. China’s crude import fell to 7.8 million barres per day last month, the lowest in 8 years.
It is speculated that China has begun tapping its oil reserves in May, in a sign that Beijing is still refraining from paying dollar for prompt crude deliveries. According to estimates by a renowned energy flow tracking firm- China is subjected to draw an average of 1 million barrels per day from its massive stockpiles displaying its preparedness to weather a global supply crises.