Shares of Oil and Natural Gas Corporation ended higher tracking the trajectory of the June contract of Brent Crude Oil futures. At close, the stock traded 3.5% higher from its previous close at Rs 240.84 on the National Stock Exchange. Brent Crude futures rose as much as 1% over its previous close after China signalled that it is open to talks with the US amid this ongoing trade-drama between the two. With this surge, ONGC became one of the top gainers in the 50-stock index of the NSE.
Higher oil price is good for upstream companies as their efforts to extract oil remain the same, but margins improve drastically. Crude oil prices have recovered some ground since the US came out with sweeping import tariffs. Brent Crude futures contract for June recovered to around $66 per barrel from below $60 per barrel.
The US has bombarded China with a new tariff rate, now increased to 245%. “China now faces up to a 245% tariff on imports to the US as a result of its retaliatory actions,” the White House said, emphasising the move as part of Trump’s ongoing “America First Trade Policy.” Just like the Brent Crude futures, ONGC also felt some selling pressure after various media reported this.
However, later in the day, a positive cue from the Chinese government alleviated some pain. China is willing to sit across the table with the US, though it has some preconditions, Bloomberg reported citing a person familiar with the Chinese government’s thinking. China wants US President Donald Trump’s administration to show more respect to China and expects it to address China’s concerns around American sanctions and Taiwan.
