Shares of companies engaged in crude oil exploration business fell sharply after crude oil prices crashed in international markets. The operator of world’s largest crude oil refining facility at Jamnagar and operator of KG-D6 basin in Krishna Godavari basin – Reliance Industries – slumped as much as 10 per cent, its biggest single-day fall in at least 10 years, to hit an intra-day low of 1,143. State-run oil explorer ONGC also slumped as much as 13 per cent to hit an intra-day low of Rs 77.80. Oil prices in international markets crashed more than 30 per cent after the disintegration of the Organization of the Petroleum Exporting Countries (OPEC)+ alliance triggered an all-out price war between Saudi Arabia and Russia that is likely to have sweeping political and economic consequences.
Crude oil fell the most since 1991 on Monday after Saudi Arabia started a price war with Russia by slashing its selling price and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak.
Brent crude futures fell by as much as $14.25, or 31.5 per cent, to $31.02 a barrel. That was the biggest percentage drop since January 17, 1991, the start of first Gulf War, and the lowest since February 12, 2016.
US West Texas Intermediate (WTI) crude fell as much as $11.28, or 27.4 per cent, to $30 a barrel. That was also the biggest percentage drop since the first Gulf War in January 1991 and the lowest since February 22, 2016. It was trading at $32.61.
Meanwhile, equity markets witnessed heavy selling pressure on Monday as benchmark indices slumped more than 4 per cent tracking a selloff in global markets, as investors panicked about the severity of coronavirus pandemic amid fears of recession.
As of 12:31 pm, Reliance Industries traded 9 per cent lower at Rs 1,155 and ONGC dropped 12.39 per cent to Rs 78.10, under-performing the Sensex which was down 4.3 per cent.
(With agency inputs)