Commodity Online
MUMBAI: Oil exploration companies traded in red on the bourses as the international crude oil prices dropped nearly 2% on Tuesday.

Leading oil exploration companies including public sector oil exploration major, Oil & Natural Gas Corporation Ltd (ONGC) recorded heavy fall on the Bombay Stock Exchange (BSE) today. ONGC was trading at Rs.1004 with a loss of 4.38% in the morning trading session today.



Private sector oil explorer, Cairn India Ltd too witnessed heavy fall of over 4% at Rs.210.95 in the initial trading session today.

Meanwhile, the benchmark index, Sensex was trading with loss of over 250 points or close to 2% in the morning trading session.

The fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

Crude futures for August 2009 contract dropped USD 1.12 or 1.75% to USD 62.93 per barrel on the New York Mercantile Exchange on Tuesday, 7 July 2009. The fall came after the industry data showed US gasoline and distillate inventories rose more than expected last week.

In the Union Budget 2009-2010 announced on Monday, 6 July 2009, the government has restored tax holiday to natural gas producers, which will benefit Cairn India. In the last financial year's budget, the government had removed seven-year tax holiday on natural gas production while continuing the same for oil production.

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