Indian upstream oil explorers surged on Wednesday, tracking a sharp rise in global crude prices after Winter Storm Fern disrupted US output, tightening near-term supply. A weakening US dollar against a basket of currencies also perked up sentiment in the oil market.
Shares of Oil India jumped as much as 10% to a fresh 52-week high of ₹492, while ONGC climbed up to 8% to ₹268 on NSE. The Nifty Oil & Gas Index rose 3.4%, outperforming the benchmark indices Nifty and Sensex, which added 0.6%.
Analysts attributed the rally to a rebound in crude prices after the storm shut nearly 15% of US oil production and briefly halted crude exports from the US Gulf Coast over the weekend, tightening global supply in the near term.
Stable crude prices directly support upstream companies’ earnings, said Divyam Mour, research analyst at SAMCO Securities. “Even a small increase in oil prices can significantly boost profits because most of their costs remain fixed,” he said.
Brent futures were trading marginally higher at $67.62 per barrel on Wednesday. A weaker dollar lifts crude because oil becomes cheaper for non-US buyers and drives investor flows into commodities that act as a hedge against dollar weakness.
Analysts said the durability of the rally hinges on whether crude can hold at higher levels. While near-term supply disruptions and geopolitical risks offer support, a sustained uptrend would require continued demand recovery and disciplined production from major exporters.
“Apart from the impact of crude oil prices on oil exploration companies, firms such as Oil India are diversifying into critical minerals, which are likely to bear fruit in the longer run and can be one of the focus areas in the ensuing Union Budget,” said Sunny Agrawal, head of Fundamental Research at SBI Securities.
For investors, ONGC and Oil India remain leveraged plays on crude price moves, offering upside when oil strengthens but carrying elevated sensitivity to reversals in global energy markets. “Any significant spurt in crude oil price can lead to a further leg up in stock prices of upstream companies and vice versa,” said Agrawal.
Chandan Taparia, head of Derivatives & Technical Research at Motilal Oswal, said Oil India has broken out of a major consolidation on daily, weekly and monthly charts with a decisive hold above the ₹490 zone. “It has surpassed an immediate hurdle of ₹465-470 with a massive volume spurt, which indicates extension of ongoing move and hold of ₹470 could extend rally towards ₹520-535,” he said.
