Higher the price of crude, better it is for the likes of MRPL, Chennai Petro, ONGC, TN Petro, Oil India because every $1/barrel rise in crude realization means a 2-4% increase in EPS. Ditto for gas too. The increase in crude price means the earnings visibility of trading, refining and upstream businesses go up while it could hurt the margins of downstream companies like BPCL, HPCL and Indian Oil.

Yesterday, rise in the Singapore gross refining margin (GRM) – the Asian benchmark, to a record high of $25.2/barrel bodes well for these Indian refiners.

GRM is the amount that refiners earn from turning every barrel of crude oil into refined fuel products.

But the risk for the upstream companies is that the Govt, pressurized under inflation, might ask these companies to share a portion of their retail subsidy burden.

MRPL hit a new high today at Rs.108.60, Chennai Petro too a new high at Rs.385.35, ONGC is up almost 5.5%, Oil India hit a new high at Rs.395; Deep Energy is locked at its 5% UC at Rs.96.10.