On September 11, 2024, many paint stocks, plastic industry scrips, and tyre companies are trading with considerable gains possibly due to a recent drop in crude oil price. Crude oil prices touched three-year lows yesterday due to concerns over a weak demand outlook. After both Brent and West Texas Intermediate (WTI) fell nearly USD 3 on Tuesday, after OPEC+ revised down its demand forecast for this year and 2025, the price of crude oil is nearly up by USD 1 on Wednesday, as concerns about Hurricane Francine in the Gulf of Mexico disrupting the supply of oil have pushed the price up.
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Stocks That Saw the Impact of Crude Price Dip
As paint products are derived from petrochemicals, a drop in crude oil prices can reduce production costs for these companies pushing their scrip value up. Asian Paints, the largest paint company in India saw a 2.25 per cent increase of Rs 74 today. From March 2024, the scrip has been rising in price.
Indigo Paint at Rs 1,515.00, rose Rs 11 and Kansai Nerolac surged by 1.33 per cent. The decrease in crude prices will tyre manufacturers as it reduces rubber production costs. This impact is reflected in the stock prices of MRF, the JK Tyre which is up by 0.54 per cent and 0.21 per cent respectively. CEAT saw a substantial 2.05 per cent hike with its scrip rising Rs 58.30.
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Also, stocks from the Chemical and Plastics Industries such as Pidilite Industries and Supreme Industries saw some gains today. Oil marketing companies (OMCs) were expected to benefit from lower crude prices, but stocks like Indian Oil Corporation and BPCL are in the red today. Meanwhile, companies involved in oil extraction like ONGC and Oil India as expected were trading in negative territory down 2.4 per cent and 5 per cent respectively.
Market concerns about weaker demand especially from China and global oversupply are weighing on the oil price. Further, the shift towards cleaner energy alternatives is another factor.
