Shares of companies linked to crude oil, including aviation, paints, tyres, and oil marketing firms, saw strong gains on Thursday, March 6, 2025. The rally came after a sharp decline in crude oil prices. Brent Crude oil price has plummeted 6.5% over the past four sessions, reaching its lowest level since December 2021, while West Texas Intermediate (WTI) dropped 5.8%, marking its lowest point since May 2023.
This downward trend in crude oil prices has driven investor interest towards sectors that benefit from reduced input costs, making it an opportune moment to invest in stocks within these industries.
How crude oil prices impact key sectors
The fall in crude oil prices is attributed to the United States imposing tariffs on Canadian and Mexican trade, including energy imports. Additionally, major oil-producing nations have increased output quotas for the first time since 2022, further pressuring global crude prices, according to a Reuters report.
As crude oil is the raw material for the paint and tyre industries, its price drop directly benefits these companies by lowering production costs. Crude oil derivatives account for approximately 55-60% of raw materials used in the paint industry. Similarly, the tyre sector relies heavily on synthetic rubber and other oil-based products, making the decline in crude prices a significant advantage.
Oil marketing companies (OMCs) such as Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation Limited (IOCL) also benefit from falling crude prices. However, upstream oil exploration firms, including Oil & Natural Gas Corporation of India Limited (ONGC) and Oil India Limited (OIL), tend to experience declines due to lower profit margins on extracted oil.
Stock performance across sectors
Among paint stocks, Asian Paints Limited was up by over 2.5% to ₹2,220 per share on the Bombay Stock Exchange (BSE), while Indigo Paints Limited climbed 2% to ₹1,039.25 per share. Berger Paints India Limited rose to ₹495.70 per share by 2.38%.
In the aviation sector, InterGlobe Aviation Limited traded flat with a positive bias, whereas SpiceJet Limited surged over 2.6%.
The tyre industry also gained momentum, with JK Tyre Industries Limited rising 0.33%, while MRF Limited climbed over 1%. Balkrishna Industries Limited rose by 1.76%, while CEAT Limited advanced by over 1%.
Oil marketing companies recorded strong gains, with HPCL rising over 3% to ₹337.10 per share on the BSE, while BPCL gained 2%. IOCL shares surged over 2% to ₹125.10.
Conversely, upstream oil exploration companies struggled due to reduced profit margins. Oil & Natural Gas Corporation of India Limited fell by 0.5% to ₹228, while Oil India Limited declined by 0.27%.
Crude oil prices stabilise after recent slump
Following a sharp four-day decline, crude oil prices showed signs of stabilisation on Thursday. Reports indicate that US tariffs on Canadian crude imports may be eased, although concerns persist regarding Mexico's trade restrictions and increased output by major producers.
Brent crude serves as the leading benchmark for crude oil pricing globally, while WTI is another key standard representing US-produced crude oil. Both benchmarks play a crucial role in determining global oil pricing trends.
Live stock market updates
As of 12:30 PM on March 6, 2025, stocks linked to crude oil showed this performance on the BSE:
Investors looking to invest in stocks within the aviation, paint, and tyre sectors may find promising opportunities as these industries stand to benefit from reduced crude oil prices. However, oil exploration firms may see a decline in profitability, which could affect long-term growth prospects. Keeping an eye on crude oil price movements is crucial for those looking to strategically invest in stocks tied to oil price fluctuations.
For android only