The move in Brent prices marked Monday’s biggest drop from an intraday high to close for the commodity from today’s high of $119.50 a barrel. Crude oil prices extended losses on Tuesday morning, falling another 10% to trade below the $90-per-barrel level.
Shares of Asian Paint rose 4% to their intraday high of Rs 2,303 on the BSE, while Berger Paint was up 1%. Akzo Nobel shares rose 3% to Rs 2,791 each. On the other side, Indigo Paint was trading largely flat.
On Monday, oil prices rose above $100 a barrel, with Brent hitting a session high of $119.50 and WTI hitting $119.48, the highest level since mid-2022. The increase comes amid fears of a supply disruption as Saudi Arabia and other producers cut production amid the US-Israeli war with Iran.
The development is significant for paint manufacturers as crude oil forms a key raw material base for the industry. Most of the materials used in the production of paint are derived from petroleum products. As a result, lower crude oil prices could reduce input costs and reduce pressure on profit margins.
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Before Trump’s latest comments, Qatar’s energy minister warned that Gulf energy producers could stop exporting within weeks. In an interview with the Financial Times published last Friday, he said such a scenario could push oil prices to $150 per barrel.
Domestic brokerage JM Financial said that every dollar increase in crude oil prices increases India’s annual import bill by about $2 billion. Prolonged tensions could raise logistics and marine insurance costs, disrupt shipping routes across the Gulf and put pressure on the country’s trade balance.
The brokerage also noted that the Indian rupee could face near-term depreciation pressure, prompting possible interventions by the RBI through foreign exchange reserves. Higher crude oil prices can add to inflationary risks, raise bond yields and pressure equity yields.
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