Shares of Oil India, ONGC and other upstream oil companies fell up to 5 percent on Thursday as crude oil prices extended their decline for the fourth consecutive session.
Upstream companies, which are engaged in the exploration and production of crude oil, tend to benefit from higher oil prices as their realisations are linked to the price of crude. However, a decline in crude prices can lower their expected realisations and earnings, weighing on their stock prices.
Shares of Oil India fell the most, declining over 5 percent to Rs 435 per share on the NSE. Oil and Natural Gas Corporation (ONGC) shares were down around 2 percent at the time of writing.
The decline in upstream stocks came as global crude oil benchmarks extended their losses. Brent crude futures fell 1.03 percent to USD 93.65 a barrel, while US West Texas Intermediate (WTI) crude futures declined USD 1.29 percent to USD 86.98.
Both benchmarks had tumbled more than 8 percent in the previous session to settle at their lowest levels since August 31. Crude oil prices have declined nearly 16 percent so far this week, reflecting a sharp reassessment of the geopolitical risks that had earlier driven prices higher.