BPCL, HPCL, IOC shares surge up to 6% as oil prices slide over $2/bbl after OPEC+ output hike

Shares of oil marketing companies - Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Indian Oil Corporation (IOC) rose as much as 6% on Monday. Oil prices dropped by over $2 a barrel as OPEC+ prepared to accelerate its oil production increases.

HPCL shares surged the highest by 5.9% to their day’s high of Rs 407.50 on the BSE, while those of BPCL and IOC rallied by 4.2% each to Rs 324.25 and Rs 149.50, respectively.

Brent crude futures dropped $2.04 a barrel, or 3.33%, to $59.25 a barrel by 2240 GMT while U.S. West Texas Intermediate crude was at $56.19 a barrel, down $2.10, or 3.60%.

Both crude benchmarks hit their lowest levels since April 9 at Monday’s open, following OPEC+’s decision to boost oil production for a second straight month, with output in June rising by 411,000 barrels per day (bpd).

The June increase by the eight members will bring the total combined output hikes for April, May, and June to 960,000 barrels per day (bpd), effectively reversing 44% of the 2.2 million bpd in production cuts implemented since 2022, according to Reuters calculations.

OPEC+ could fully reverse its voluntary production cuts by the end of October if member nations fail to improve compliance with their output quotas, sources told Reuters. Saudi Arabia is reportedly pushing for a faster rollback of cuts to penalize Iraq and Kazakhstan over their continued non-compliance.

Also read: Oil slumps after OPEC+ plan, US stock futures drop

Meanwhile, tensions escalated in the Middle East after Israeli Prime Minister Benjamin Netanyahu pledged retaliation against Iran following a missile strike by the Tehran-backed Houthi group near Israel's main airport.

In response, Iran’s Defence Minister Aziz Nasirzadeh warned on Sunday that Tehran would retaliate if attacked by the United States or Israel.

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