ONGC, Oil India shares jump up to 10% to fresh record highs as oil prices rise

Mumbai | January 28

Shares of state-run oil producers Oil and Natural Gas Corporation and Oil India rallied sharply on Tuesday, rising as much as 10% to new highs, as global crude oil prices moved higher on supply disruptions and geopolitical concerns.

At around midday trade, Brent crude was trading close to $68 per barrel, its highest level in four months, while WTI crude hovered near $63 per barrel.

Oil prices were supported by a combination of production losses in the US due to a severe winter storm, weakness in the US dollar, and renewed tensions in the Middle East, including concerns over a possible escalation involving Iran.

Why oil prices are rising

Oil prices moved higher after a severe cold wave disrupted energy production in the United States. Analysts estimate that up to 2 million barrels per day, or around 15% of US output, was temporarily lost over the weekend as extreme weather strained energy infrastructure.

Shipments of crude oil and liquefied natural gas from US Gulf Coast ports were also hit, with exports falling to zero on Sunday, according to ship-tracking data. Production issues in Kazakhstan added to supply concerns, further supporting oil prices.

Geopolitical tensions have also pushed prices higher. Reports of increased US military presence in the Middle East have raised concerns over potential escalation involving Iran, keeping oil markets on edge.

Some market participants, however, warned that gains may be limited once supply disruptions ease, with crude prices expected to remain around the $60-a-barrel range in the near term.

Rising oil prices are beneficial for upstream oil companies such as ONGC and Oil India, as their earnings are directly linked to crude price realizations.

ONGC share price

ONGC shares rose over 7% to hit a fresh 52-week high of ₹266.2. The stock is up nearly 10% so far in January, extending a pattern of positive January returns in most years since 2022.

Sentiment was also supported by a recent corporate announcement, where ONGC said it had signed shipbuilding contracts with Samsung Heavy Industries for two Very Large Ethane Carriers (VLECs) to support ethane transportation for its petrochemical subsidiary OPaL.

Oil India share price

Shares of Oil India surged nearly 10% to touch a fresh 52-week high of ₹492.The stock has gained over 12% in the past five trading sessions and more than 18% over the last one month, tracking higher oil prices and improving sentiment around upstream oil producers.

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