State-run oil companies settle 6 per cent higher on Iran deal

MUMBAI: Shares of oil marketing companies today ended as much as 6 per cent higher after Brent crude prices fell following a historic nuclear deal between Iran and world powers.

Hindustan Petroleum Corporation ( HPCL) surged 6 per cent to Rs 214.55, while Bharat Petroleum Corporation ( BPCL) gained 4.45 per cent to close at Rs 347.50 on BSE.

Shares of Indian Oil Corporation ( IOC) went up by 2.52 per cent to Rs 205.75.

"Crude oil prices fell sharply after the sanctions were eased on Iran, which would benefit India's economy as it would cut down on growing CAD (current account deficit) by reducing the import cost on crude oil.

"Although the deal is an interim deal, it shows promise that crude oil prices might remain low for the foreseeable future, a positive sign for the Indian economy that relies heavily on Iran for its crude oil needs," said Raghu Kumar, Cofounder, RKSV.

Crude oil prices fell to USD 94.84 a barrel and Brent crude dropped to USD 111.05 per barrel.

Market analysts said hopes of drop in import bill after crude oil prices fell in the overseas markets fuelled buying in oil stocks.

Capping four days of negotiations, representatives of the P5+1 group of nations - the US, the UK, Russia, China, France and Germany - reached an agreement with Iran in Geneva yesterday.

Under the deal, Iran agreed to give better access to inspectors and halt some of its work on uranium enrichment. But Iranian authorities insisted they still had a right to nuclear power.

In return, there will be no new nuclear-related sanctionson Iran for six months.