Crude Oil Market: Shares of oil and gas companies slipped on Tuesday, a day after the US crude oil futures collapsed below $0 for the first time in history. At 11.00 a.m, the S&P BSE Oil & Gas index was trading lower by 2.9 per cent at 11,006.
US crude oil futures turned negative for the first time ever on Monday as the coronavirus pandemic and resultant lockdowns paralysed the world economy and caused fears about swift return to growth. May crude oil price futures settled at minus $37.63 a barrel on Monday, a 306 per cent daily drop, driven by the rapid filling of the main US storage hub at Cushing, Oklahoma – the delivery point for West Texas crude.
However, the US oil prices rebounded into positive territory on Tuesday. The futures for May delivery of West Texas Intermediate rose nearly $39 but were still just $1.76 a barrel.
Oil prices have been witnessing selling pressure for the past many weeks as the coronavirus outbreak hammered demand for oil and the Saudi Arabia-Russia price war led to a global glut in supplies. The fall in oil prices and demand collapse due to lockdown will lead to inventory loss (on crude oil and products) as well as profitability,
Among individual stocks, Oil and Natural Gas Corporation was trading lower by 5.2 per cent lower at Rs 70 to be the biggest loser in the Oil & Gas pack. Reliance Industries, GAIL and Petronet LNG had declined around 5 per cent each. Oil marketing companies were also having a rough rise, with IOC, BPCL and BPCL shedding 2-3 per cent each, on the BSE.
The Sensex had shed 917 points at 30,730 and the Nifty had lost 261 points at 9,001 at the time.