Oil Stocks Outlook
Seen down; crude price fall, fuel hikes unlikely to help
This story was originally published at 21:42 IST on 29 May 2026
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MUMBAI – Shares of oil marketing companies are expected to remain under selling pressure in the near term even though crude oil prices have fallen significantly this week, according to analysts. An increase in retail fuel prices has eased some of the pressure on these companies, but they will still make huge losses in the coming quarters, they said.
The Nifty Oil & Gas index is likely to be in a range next week after three weeks of consolidation, according to Vipin Kumaar, senior technical and derivatives analyst at Globe Capital Market. Kumaar sees the support level for the index at 10900 points and resistance at 11600 points.
Brent crude oil price eased to around $91 per barrel as of Friday from well above $100 per barrel a week ago on hopes of a peace deal between the US and Iran and the resumption of shipping through the Strait of Hormuz. However, oil prices are unlikely to fall further until the negotiations end in peace. Even after the recent downtrend, crude oil prices are still around 30% higher than the pre-war level and 50% higher than a year ago.
"I think that as long as crude oil prices are where they are, selling will be there in both oil marketing companies as well as in upper stream companies," Swarnendu Bhushan, co-head of research at Prabhudas Lilladher, said.
The White House has said over the past few days that 95% of the issues between the US and Iran have been taken care of, but crucial issues such as Iran's nuclear programme are yet to be resolved. The US and Iran have reportedly agreed on a memorandum of understanding to extend the ceasefire in West Asia for 60 days, giving them time to negotiate a formal peace deal. However, President Donald Trump is yet to approve the plan to extend the ceasefire.
Owing to the rise in crude oil price, the Centre has raised retail fuel prices. Indian Oil Corp. raised retail prices of petrol and diesel for the fourth time in May Monday, taking the total increase in price of petrol to INR 7.35 per litre and in diesel to INR 7.53 per litre. "They are obviously aiding, but you still have huge losses and if crude oil prices go down, you will also see the return of the excise duty," Bhushan said. "So, that's why we are from here negating on oil marketing." On Mar. 27, the government had cut the excise duty on petrol to INR 3 per litre from INR 13 and on diesel to nil from INR 10 per litre to help the oil marketing companies. The cut in excise duty was not passed on to the end users.
Bhushan expects the Nifty Oil & Gas index to move in line with the headline index as shares of heavyweight Reliance Industries have already corrected. "So, from here I don't expect Reliance to correct much, but other guys (companies) might correct. So, overall it might remain flat is where I would think."
TOP HEADLINES
* SC rejects SEBI's INR-4.5-bln disgorgement order vs RIL, upholds penalty
* EIA says US natural gas stocks up 92 bcf in week ended May 22
* RIL expects global oil demand to be sluggish due to West Asia conflict
* Centre asks states to take action as fuel sale arbitrage creates scarcity
* RIL to hold 49th AGM on Jun 19 via video conferencing
* Oil India arm, Hindustan Waste Treatment to form JV for bioenergy projects
* Analyst Concall: Trend of more earnings from gas than oil to continue - ONGC
* Earnings Review: ONGC Q4 PAT rises 3% on year, sharply below Street view
* SC accepts RIL plea to resolve KG-D6 gas migration case through conciliation
* SC upholds lower custom duty for exxsol hexane, rejects customs plea vs RIL
* Govt OKs 1-mo window for consumers to give up domestic LPG after PNG switch
* Current under-recovery levels of oil marketing cos unsustainable, says ICRA
* Govt says losses of oil cos narrowed to INR 6 bln/day after fuel price hike
* ONGC selects BP Plc arm as technical svc provider to increase oil output
* Risks to crude oil supply seen easing, may cap prices - ANZ Research
* Oil India targets 100 wells in FY27, INR 200 bln invest in new energy by 2040
* IOC ups fuel prices 4th time in May, petrol now costs INR 102.12/ltr in Delhi
* IOC hikes petrol, diesel retail prices for third time in eight days
* GAIL to spend INR 116 bln as capex in FY27, sees LNG demand rising manifold
Following are the resistance and support levels for key oil stocks for next week as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % |
Resistance | Support |
| Bharat Petroleum Corp. | 298.10 | 0.90 | 322.00 | 278.00 |
| Hindustan Petroleum Corp. | 393.85 | 1.10 | 416.60 | 378.60 |
| Indian Oil Corp. | 140.24 | 0.60 | 149.70 | 134.90 |
| Oil & Natural Gas Corp. | 265.40 | (-)8.50 | 282.20 | 253.20 |
| Oil India | 476.15 | (-)4.70 | 494.10 | 463.40 |
| Reliance Industries | 1,321.20 | (-)2.50 | 1,387.70 | 1,283.70 |
| Index | Level | |||
| Nifty Oil & Gas | 11200.25 | (-)1.50 | 11781.10 | 10847.20 |
| Nifty 50 | 23547.75 | (-)0.70 | 24196.50 | 23160.40 |
| S&P BSE Sensex | 74775.74 | (-)0.90 | 76825.90 | 73564.00 |
End
US$1 = INR 95.00
Reported by Ashutosh Pati
Edited by Rajeev Pai
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