Aviation and oil marketing companies' stocks were the top gainers in trade today as crude oil prices fell to $65.02 per barrel mark marking second consecutive day of decline after US President Donald Trump urged OPEC not to cut supplies to prop up the market. While the SpiceJet stock gained 4.24%, InterGlobe Aviation rose 7.52% on BSE. The Jet Airways stock too gained 2.24% on the BSE.
Stocks of oil marketing companies too gained in value. While HPCL rose 8.18%, BPCL gained 7.50%. State-run Indian Oil Corp was trading 6.94% higher on the BSE.
The BSE oil and gas index was among the top sectoral gainers rising 2.16% or 292 points to 13,852 level.
Oil prices posted the deepest plunge in more than three years in the international market. Brent crude, used to price international oils, dropped to $65.17 a barrel. Oil has now fallen roughly 30 percent for 12 straight days, driven by worries over rising oil production around the world and weakening demand from developing countries, with expectations for increased supply from the US and OPEC.
Oil prices started retreating on Tuesday after US President Donald Trump flayed Saudi Arabia's call for production cuts and pressed oil cartel OPEC for lower prices based on supply. Weak oil demand outlook by OPEC and worries about oversupply and US-China trade war also weighed on oil prices.
Trump's statement came after top oil exporter Saudi Arabia announced a supply cut in December and other producers considered reductions heading into 2019.
The Indian market too welcomed the fall in international oil prices and opened higher today. Every dollar per barrel change in crude oil prices impacts the import bill by Rs 823 crore ($0.13 billion). The same is also the impact when currency exchange rate fluctuates by Re 1 per US dollar. While the Sensex rose 106 points to 35,250, the Nifty gained 33 points to 10,615.
The decline in prices continued last week after the US said it would let eight countries keep importing Iranian oil. That eased fears that new US sanctions on Iran would cause shortages and drive prices higher.
Saudi Arabia's energy minister Khalid al-Falih said on Sunday that the kingdom will reduce exports by around 500,000 barrels a day from November to December. Russian oil minister Alexander Novak said his country was open to cuts, at a meeting of oil producers in Abu Dhabi.