ONGC, Oil India Shares Soar to Record Highs as Oil Prices Surge

The shares of Oil & Natural Gas Corporation (ONGC) and Oil India witnessed a sharp rally on January 28, surging up to 10% amid a strong rise in global oil prices. The move pushed both stocks to fresh 52-week highs, reflecting renewed optimism in the oil sector on the back of supply disruptions and geopolitical tensions.

Market Performance: Nifty Oil & Gas Index Leads Gains

The Nifty Oil & Gas index outperformed broader markets, climbing over 3% to 11,735.55 by 11 am. ONGC and Oil India were among the top gainers, tracking the upward momentum in crude prices.

• Brent crude futures rose 33 cents to $67.90 per barrel.
• WTI crude futures gained 42 cents to $62.81 per barrel.

The surge in oil prices comes amid disruptions in the US crude output caused by a severe winter storm, which hit production and exports along the Gulf Coast.

Why Oil Prices Are Rising?

Global crude prices extended gains due to multiple supply-side concerns:

• US production disruption: Analysts estimate a loss of up to 2 million barrels per day, roughly 15% of the national output over the weekend.
• Export halt: Crude and liquefied natural gas (LNG) exports from US Gulf Coast ports dropped to zero on Sunday, impacting global supply.
• Kazakhstan supply impact: Reduced production from Kazakhstan added further support to crude prices.
• Geopolitical tensions: Rising US-Iran tensions, including the presence of a US aircraft carrier in the Middle East, contributed to market caution and strengthened crude prices.

Together, these developments have set the stage for strong momentum in oil-related stocks, boosting activity and attention in ONGC and Oil India.

ONGC Share Price Movement

ONGC shares jumped over 7%, touching a fresh 52-week high of Rs 266.2 per share.

Key developments supporting the stock include:

• Shipbuilding Contracts (SBCs): ONGC signed contracts with Samsung Heavy Industries, South Korea, to build two state-of-the-art Very Large Ethane Carriers (VLECs).
• Joint Ventures in GIFT City, Gujarat: ONGC and MOL Japan have established Bharat Ethane One IFSC Pvt. Ltd. and Bharat Ethane Two IFSC Pvt. Ltd., each operating one VLEC.
• Capacity: The VLECs will have a cargo capacity of one lakh cubic meters each, transporting about 600 KTPA of ethane for OPaL, a subsidiary of ONGC.
• Flag: Both vessels will be Indian-flagged, strengthening domestic maritime capabilities.

Performance snapshot:

• Past 5 days: ONGC shares up ~9%
• Past 1 month: Gains of ~12%

Oil India Share Price Movement

Oil India shares mirrored ONGC’s rally, jumping nearly 10% to Rs 492, marking a 52-week high.

Performance snapshot:

• Past 5 days: Up ~11%
• Past 1 month: Up ~18%

The stock’s surge reflects investor confidence in Oil India’s ability to capitalize on rising global oil prices and the favorable market environment for oil production and export.

Summary

The combined rally in ONGC and Oil India shares highlights how supply disruptions and geopolitical risks continue to shape the Indian oil sector.

• ONGC reached Rs 266.2, boosted by VLEC contracts and joint ventures.
• Oil India surged to Rs 492, reflecting strong market sentiment.
• The Nifty Oil & Gas index climbed over 3%, with Brent and WTI crude showing upward momentum.

Investors tracking oil-linked stocks will closely watch global crude trends and geopolitical developments, as these remain the key drivers for market performance.

Source: Moneycontrol