ONGC and Oil India Share Prices Surge 5% as Crude Oil Prices Rally

Market Performance Overview

ONGC and Oil India share prices witnessed significant gains of up to 5% during Thursday's morning trading session on June 12. The rally came amid a sharp surge in global crude oil prices, which directly benefits the earnings outlook of upstream oil producers.

The positive momentum in these energy stocks reflects improved investor sentiment as higher crude prices translate to better net realizations for domestic oil production companies.

Main News: Crude Oil Price Surge Drives Stock Rally

Brent Crude Recovery Boosts Sentiment

Crude oil prices have gained significant traction amid escalating geopolitical concerns in the Middle East. Brent Crude prices have surged from approximately $61 per barrel in April to current levels of $69 per barrel.

Heightened security risks in the Middle East region have primarily driven the price movement.

Impact on ONGC and Oil India Operations

The rising crude prices directly improve the outlook for net realizations that upstream oil producers, such as ONGC and Oil India, earn from their operations. Higher crude prices typically translate to improved profitability margins for these companies.

The declining crude price trend had previously been a significant concern for both companies' earnings outlook. 

Company Share Price Movement Details

ONGC Share Price Performance

ONGC share prices demonstrated strong intraday performance with the following metrics:

• Opening price: ₹251.05
• Intraday high: ₹255.15
• Percentage gain: Over 3%
• Trading volume: Increased significantly

Oil India Share Price Performance

Oil India share prices showed even stronger momentum during the trading session:

• Opening price: ₹473.05
• Intraday high: ₹488.80
• Percentage gain: Close to 5%
• Market response: Positive across all metrics

Recent Performance Analysis

Three-Month Trend Overview

For the past three months ending May 23, ONGC share prices had remained relatively flat, underperforming the benchmark Nifty Index, which gained 8% during the same period.

This underperformance was attributed to the downtrend in oil prices, which offset the emerging visibility of growth in oil and gas production expected over the next three years.

Quarterly Impact on Earnings

ONGC's net realization before windfall tax declined by approximately 9% year-on-year in the January-March 2025 quarter. This decline was primarily due to falling crude prices during that period.

The current rise in crude prices is raising investor optimism regarding potential earnings growth for both companies in upcoming quarters.

Market Outlook and Key Factors

Geopolitical Influence on Pricing

The spike in Brent crude to $70 levels is attributed to heightened security risks in the Middle East. This geopolitical factor continues to support higher crude oil prices globally.

Both ONGC and Oil India are well-positioned to respond positively to sustained higher crude prices, given their focus on upstream operations.

Sustainability of Price Levels

The key factor for the continued positive performance of ONGC and Oil India share prices will be the sustainability of higher crude price levels. Market participants are closely monitoring geopolitical developments and the interplay of supply and demand dynamics.

Current market conditions indicate that crude prices must remain at these elevated levels to support continued earnings growth for domestic oil producers.

Summary

ONGC and Oil India share prices gained up to 5% on June 12, driven by a significant surge in crude oil prices from $61 to $69 per barrel since April. The rally reflects an improved earnings outlook for upstream oil producers as higher crude prices enhance net realizations.

ONGC shares rose over 3% to ₹255.15, while Oil India shares gained nearly 5% to ₹488.80 during intraday trading. The recovery follows three months of flat performance, driven by declining oil prices.

The current surge in crude prices, attributed to Middle East geopolitical tensions, has restored investor confidence in these energy stocks. Sustained higher crude prices will be crucial for continued earnings growth and positive share price momentum for both companies.