Oil India, ONGC Shares Rally Up to 10%

Amid rising global oil prices, shares of Oil India and ONGC surged on Wednesday with gains of as high as 10% at one point during intra-day trading. Oil India set a new 52-week intraday high of ₹492 while ONGC reached ₹266.05 on the BSE exchange. The rising prices for Brent crude are benefiting oil upstream companies directly. 

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Oil India saw a threefold increase in trading volume from what it typically had in previous sessions. A large amount of trading took place during this period as well.

Global Oil Price Surge

The substantial rise in oil prices occurred after a winter storm disrupted production along the United States' Gulf Coast. On Tuesday, crude oil prices increased by 3% from the closing price on Monday. After settling on Tuesday, Brent crude oil settled at $67.57. The price of WTI on Tuesday was $62.39.

U.S. crude oil exports ceased over the weekend. Upstream oil companies' revenue is dependent on the pricing of Brent crude oil. Consequently, by tracking Brent prices closely, these companies reap the rewards of higher crude prices.

Strategic Contracts and Hiring

Mitsui OSK Lines and ONGC Sign Huge Vessel Construction Agreement

Two enormous ethane carriers will be constructed at Samsung Heavy Industries for Mitsui OSK Lines and ONGC through joint ventures (JV).

To explore western offshore oil fields, the state-owned oil and gas exploration company has issued a call for technical specialists to provide a bid by March 16 for interested global participants.

The process will be finished in June, and then the contract will go through reviews.

Policy Support and Expansion

To ensure an increase in national production of hydrocarbons and reduce dependence on imports, the Indian Government has issued a policy that supports investments in the exploration and production of hydrocarbons.

The Ministry plans to expand the area of exploration from the current 1,000,000 square kilometres to cover 99% of the current offshore restricted zones.

Higher international oil prices due to the depreciation of the rupee are helping oil companies maximise their returns as the energy landscape continues to change.