Oil exploration stocks slip and slide

Oil exploration and production (E&P) companies like Cairn India, ONGC, Aban Offshore are languishing in the red today’ all three figure out amongst the top five losers on the BSE currently.

The reason – the failed Doha talks where once again, no decision was taken by the OECD members on an oil production freeze, which in turn, could have boosted crude oil prices. Saudi was pretty miffed as Iran point blank refused to freeze its oil production, especially when it has just started exports of oil in a big way. This was mainly politics at play at the meet as Saudi and Iran stand on opposite sides of waring Yemen and Syria. The breakdown of Doha talks means there is no real reason once again for oil prices to firm up and that has worried the E&P companies.

Following this stalemate, today morning, crude oil fell more than 5% in Asia and brent, the international benchmark, was down 5.2% at $40.87 a barrel. More fall could be arrested as Kuwait’s domestic workers have declared a strike yesterday and already production in Kuwait has declined by almost two-thirds to around one million barrels per day, even as foreign workers continued to work.