Oil shares stay afloat as Nymex, Brent crude prices slide further

Even as broad market sentiment continued to remain weak after early fall, shares of government-owned oil marketing companies bucked the trend and rose up to 3 percent as global crude prices fell further US crude output hit nearly one-year low on Wednesday. In the wake of persisting oil supply glut, the Nymex light, sweet crude for October delivery declined 3.9 percent or $1.79 to $44.15 a barrel, while Brent crude tumbled 3.9 percent or $1.94 to $47.58 a barrel. Both the oil benchmarks haven fallen 59 percent from their respective highs in June 2014. [caption id=“attachment_2401134” align=“alignleft” width=“380”]  Reuters[/caption] Oil marketing companies benefit from lower crude prices contrary to oil explorers which are facing tough times as falling prices have made cost recovery for many companies in this segment difficult. With both petrol and diesel now out of regulatory controls, these OMCs are selling fuel at market rates, translating into improved earnings performance. At 11.55 am, shares of MRPL rose 2.8 percent to Rs 53.40, Essar Oil advanced 2 percent to Rs 190.30, Bharat Petroleum Corp moved up 1.4 percent to Rs 832 and Hindustan Petroleum Corp gained 1 percent to Rs 792. On the other hand, BSE Oil & Gas index shed 0.8 percent to 8,589.71, while benchmark Sensex was down 1.2 percent at 25,414.60.