InvestorQ : What explains the sharp rally in ONGC and Oil India in last few days?
Tisha Malhotra made post

What explains the sharp rally in ONGC and Oil India in last few days?

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Aashna Tripathi answered.
3 months ago
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Both ONGC and Oil India have gotten close to their 52-week high levels with ONGC also joining the party. Oil India has gained more than 75% since the beginning of 2021 already as it benefited from the sale of stake in Numaligarh Refinery and plans to reduce its debt. The immediate trigger for the two stocks has been the sharp spike in Brent crude prices to $74/bbl after a larger than expected drawdown in crude oil stocks in the US.

After a brief lull, crude oil prices are back close to the $75/bbl level and that has been positive for extractors like ONGC and Oil India. In addition, natural gas prices globally have rallied by 80% this year and that has also benefited these two companies. The recent NCD issue of ONGC worth Rs.7,500 crore got a “AAA” rating from ICRA. All these factors have helped sentiments around the stock.

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