Why has ONGC rallied so rapidly in the last few days?

ONGC rallied 5.5% on Friday and has recently registered a 32-month high price of Rs.174.65 in the stock markets. Its outlook has largely improved on account of rising oil prices. It is also expected to boost the bottom line as ONGC is expected to announce solid results for the third quarter. Brent crude recently crossed $90/bbl for the first time in 7 years amidst rising political tensions between Ukraine and Russia apart from tensions in the Middle East.

On the supply side, OPEC is yet to fully roll back its 3.4 million bpd production cuts initiated in April 2020. Robust demand has also boosted and most oil producers are not complaining. Ramp up of production from KG basin could be another positive trigger for ONGC stock. However, the output of oil and gas is expected to fall 2.7% in Q3. Average realizations are expected to be closer to $78/bbl, which is what is boosting prices.