August 8, 2022 [CNBC TV] – Shares of oil and gas companies – Reliance Industries, Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation, and Oil and Natural Gas Corporation – Traded mixed on Monday after a few of them reported earnings in the week gone by while oil prices dropped near multi-month lows.

Sectoral index BSE Oil  and Gas dipped more than a percent in intraday but was up 0.2 percent on BSE at 12 pm.

The overall downtrend in the oil and gas pack comes on a day when brent crude slipped to a six-month low as recession fears hurt the demand outlook. Front-month prices hit the lowest levels since February last week, tumbling 13.7 percent and posting their largest weekly drop since April 2020. In the previous week, US crude fell 9 percent while brent gave up 14 percent to pre-Russia-Ukraine conflict levels.

Meanwhile, data also pointed to a slow recovery in China`s crude imports last month.

According to Australia and New Zealand Banking Group, global oil demand for 2022 is now estimated to rise by 1.8 million barrels per dolar (bpd) year-on-year and settle at 99.7 million bpd, just sort of  pre-pandemic highs.

Independent market expert Kush Ghodasara, said sliding oil positively impact most sectors, excluding OMCs.

`Sliding oil prices will cut down fuel costs and transportation costs for most the sectors, which will help improve the margins of the companies. Therefore, sliding oil proces this quarter will help tame inflation, which could result in a growing economy,`he said.

Here is how oil and gas stocks are faring following the developments.

ONGC /  0.40%

Oil India Limited / -0.91%

Petronet LNG / -2.50%

Gail / 0.30 %

Reliance / 1.65%

BPCL / -3.45%

Indian Oil Corporation / 0.82%

Gujarat Gas / 1.55 %

Mahanagar Gas Limited / 3.96%

Hindustan Petroleum / -4.37%

Source; BSE

The mixed trend in the stocks also reflects the impact of earnings of the companies for the April to June 2022 quarter.

State-owned Indian Oil Corporation, Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroluem Corporation Ltd. posted a combined loss of Rs 18,480 crore on holding petrol and diesel prices despite a rise in cost.

According to stock exchange filings by the three fuel retailers, the losses were due to erosion in the marketing margin on petrol, diesel and domestic LPG.

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