Among public sector oil marketing companies (PSU OMCs), Bharat Petroleum Corporation (down 1.65%), Indian Oil Corporation (down 1.28%) and Hindustan Petroleum Corporation (down 0.54%) edged lower.
Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
In the commodities market, Brent crude for March 2020 settlement was up 79 cents a barrel, or 1.15% at $69.06 per barrel. The contract surged 5.44% to hit the day’s high at $71.99 per barrel.
The contract fell 64 cents or 0.92% to settle at $68.27 a barrel on Tuesday, 7 January 2020.
Early on Wednesday, Iran fired more than a dozen missiles at two US military targets inside Iraq in response to the United States’ killing of senior Iranian military commander Qassem Soleimani last week. In a reaction, US diplomats said to “take all necessary measures to protect and defend”. Though, the US President later-on tweeted, All is well! and so far so good!
India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). Higher crude prices also leads to a spike in domestic inflation.
