Crude oil prices crash: Here are the stocks witnessing a positive reaction on Thursday

Oil-sensitive stocks witnessed a sharp rally on Thursday, November 5, after global crude oil prices plunged more than 8% overnight, falling below the $100-a-barrel mark and subsequently slipping under $95 a barrel.

Shares of state-run oil marketing companies (OMCs), including Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL) and Indian Oil Corporation (IOC), gained around 5% in Thursday’s trade.

A sharp decline in crude oil prices generally benefits OMCs by lowering their input costs and potentially improving marketing margins. The fall in crude prices also lifted sentiment across other oil-sensitive sectors, including aviation, tyres and paints, where lower fuel and raw material costs can support profitability.

Shares of JK Tyre, IndiGo, Asian Paints and several other companies across oil-sensitive sectors advanced on Thursday as the sharp decline in global crude oil prices improved the outlook for input costs.

JK Tyre surged 5.6% to ₹351.50 in early trade, while InterGlobe Aviation, the parent company of IndiGo, climbed 5.04% to ₹5,400. Asian Paints advanced 4.44% to ₹2,525.70, while Apollo Tyres gained 4.37% to ₹420.

Other gainers included CEAT, which rose 3.25% to ₹3,526, Kansai Nerolac Paints, up 2.84% at ₹200.86, and Berger Paints, which gained 2.75% to ₹498.45. SpiceJet also advanced 1.83% to ₹7.78.

However, upstream oil producers remained under pressure amid the decline in crude prices. Oil India fell 3.07% to ₹443.95, while ONGC slipped 1.60% to ₹231.24.

Why are crude oil prices falling?

Both Brent crude and the US benchmark West Texas Intermediate (WTI) declined more than 8% overnight. Brent crude settled near $95 a barrel, while WTI fell towards $88. The decline marked the steepest single-day fall in crude oil prices since May.

Crude oil prices extended their losses following the Democrats’ sweeping victories in the US midterm elections, securing control of both the Senate and the House of Representatives. The outcome has fuelled expectations that mounting political pressure on the Republican administration could accelerate efforts to end the war with Iran and secure a negotiated settlement.

US Vice President JD Vance, in a lengthy post following the election results, acknowledged that voter frustration over the war and the US-Israel relationship had contributed to the Republican defeat. Senate Minority Leader Chuck Schumer, a Democrat, also pledged to work towards ending the war.

Adding to expectations of a potential de-escalation were remarks by US President Donald Trump to the Financial Times on Wednesday, when polling was still underway. Trump indicated that there were no immediate plans to intensify attacks on Iran and acknowledged that the war had played a significant role in the Republican electoral setback.

Meanwhile, oil shipments through the Strait of Hormuz have increased despite escalating attacks on commercial vessels in the region. However, supplies of refined petroleum products remain constrained, contributing to elevated gasoline and diesel prices in the US and adding to voter dissatisfaction.

Crude prices had also remained above $100 a barrel through October amid escalating attacks by Ukraine and Russia on each other’s energy infrastructure, adding to concerns over global energy supplies.

Analysts at BOK Financial Securities believe that Democratic control of Congress could also constrain US military spending and increase the likelihood of an earlier end to the conflict.

Meanwhile, fresh US inventory data pointed to continued tightness in petroleum product supplies. Government data released overnight showed that US distillate inventories, which include diesel, fell below 100 million barrels last week, their lowest level since 2003. Crude oil inventories also declined for the fifth consecutive week.