OMC stocks up 16% in 4 sessions as crude hits 3-year low, but 4 key risks still loom
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A sharp 6% correction in crude oil prices has fueled a rally in state-run oil marketing companies (OMCs), with stocks gaining up to 16% over four consecutive sessions. Investors are optimistic that lower crude prices will boost OMC margins, but several headwinds persist, including higher crude oil imports from the US, LPG under-recoveries, and a depreciating rupee. The crude prices are currently at a 3-year low and Brent has slipped below the $70/ bbl mark while the US WTI is hovering around $66/bbl. The prices of Brent and US WTI crude are falling as the US President Donald Trump is pushing the Organization of the Petroleum Exporting Countries (OPEC) to produce more oil. The consortium has responded in the positive and has stated that it will increase the crude oil production, starting this April. OPEC has decided to proceed with gradual rollback of the 2.2mbpd voluntary production cut effected in November 2023 and the cuts will be rolle...
