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Oil marketing firms, aviation stocks close higher as brent crude price falls below $69 per barrel

Oil marketing firms, aviation stocks close higher as brent crude price falls below $69 per barrel

Brent crude prices were trading at $68.15 per barrel, down 2.08% from their previous close. Benchmark US crude fell 78 cents to $59.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract sank 26 cents on Monday to $59.93.

Aviation and oil marketing companies' stocks rose in trade today as crude oil prices fell below the $69 per barrel mark after US President Donald Trump urged OPEC not to cut supplies  to prop up the market. While the SpiceJet stock closed 0.99% higher, InterGlobe Aviation rose 2.68% on BSE.  The Jet Airways stock too gained 5.21% on the BSE.

Stocks of oil marketing companies too gained in value as brent crude prices fell below $69 per barrel. While HPCL rose 3.17%, BPCL gained 4%. State-run Indian Oil Corp closed 4.47% higher on the BSE.

The BSE oil and gas index was among the top sectoral gainers rising 1.80% or 239 points to 13,559 level.

Trump's statement came after top oil exporter Saudi Arabia announced a supply cut in December and other producers considered reductions heading into 2019.

Brent crude prices were trading at $68.15 per barrel, down 2.08% from their previous close. Benchmark US crude fell 78 cents to $59.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract sank 26 cents on Monday to $59.93. Even with the slump, however, oil prices are still higher than they were a year ago.

Concern about oversupply has pushed oil prices down by roughly 20 percent since early October. 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.

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.

Reacting to the falling brent crude prices, the Indian currency closed 22 paise higher at 72.67 level today compared to the previous close of 72.89 per dollar on Monday.

On Monday, the rupee settled at 72.89 per dollar, showing a loss of 39 paise or 0.54 per cent over the last close due to a rise in oil prices after Saudi Arabia announced plans to cut production and the dollar strengthened in global markets.

Cutting short the 10-day selling trend, crude oil prices rose by around 1 per cent to touch $71 per barrel mark on Monday after the world's largest oil exporter Saudi Arabia announced plans to cut production by 500,000 barrels per day from December and called for a global output cut of one million barrels per day to support oil price.