Aban Offshore is top loser as oil price slides

Most of the offshore stocks are in the red today and it is led by the current top loser on the BSE, which is Aban Offshore. The stock opened weak and slipped further into the red. It is currently down 2.5% at Rs.495 levels and this is after intra day low at Rs.489.

The falling crude oil price is good news for all but ominous for offshore companies. The oil slide continued and today too brent crude slipped 1.3% to $65.98 a barrel, though it remained above a five-year low of $65.29 touched on Tuesday. U.S. crude futures were down 1.4 percent at $62.96. Oil prices have been under pressure amid a massive supply glut, after OPEC decided against an output cut.  Adding to pressure on crude prices, the American Petroleum Institute, an industry group, reported a 4.4 million barrel build in crude stockpiles last week when analysts had predicted a drop. Now there is talk of oil hitting $60/barrel soon and some are predicting even  further slide from there.

Falling crude price means offshore companies would find it uneconomical to further expand and exploration and even produce at current levels. Thus there is mounting worry that offshore companies might start slowing down all activities.