Shares of Indian refiners Chennai Petroleum Corporation Ltd (CPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) experienced significant gains in Wednesday's trading session, October 7, 2026. CPCL saw its stock price climb by 13.15 percent, reaching a day's high of Rs 1,591, while MRPL shares advanced 5.56 percent to Rs 184.30. This rally also extended to other energy companies like Antelopus Selan Energy Ltd and Hindustan Oil Exploration Company Ltd (HOEC), which recorded gains of up to 4 percent.
Crude Oil Prices Fuel Refiner Profits
The primary driver behind the surge in CPCL and MRPL shares is the escalating global crude oil prices. Analysts indicate that higher crude prices, while a challenge for oil marketing companies (OMCs), tend to benefit refiners like CPCL and MRPL. Choice Institutional Equities previously highlighted this dynamic, suggesting target prices of Rs 1,540 for CPCL and Rs 215 for MRPL.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, further elaborated that a sustained increase in global crude oil prices, coupled with robust Gross Refining Margins (GRMs), provides strong support for refiners. GRM represents the crucial difference between the total value of petroleum products produced by a refinery and the cost of the raw crude oil.
Global Factors Driving Crude Price Hikes
Global crude oil benchmarks have shown notable increases. Brent futures rose by 0.84 percent to $101.42 a barrel, and US West Texas Intermediate (WTI) crude futures climbed 0.73 percent to $90.09 a barrel. Several interconnected global events are contributing to this upward trend:
- Approaching US Storm: A storm forming in the Gulf of Mexico is projected to become the first Atlantic hurricane of 2026 within two days. This poses a significant threat to US oil and gas-producing facilities, as offshore areas in the storm's path account for approximately 15 percent of US crude oil production and 5 percent of its natural gas output.
- Geopolitical Tensions: Attacks by Yemen's Iran-backed Houthis on Saudi Arabia have raised concerns about potential supply disruptions in the Middle East.
- US-Iran Relations: Strained relations between the United States and Iran, with US President Donald Trump commenting on the ongoing US-Israeli war with Iran, further contribute to market uncertainty regarding oil supplies.
These combined factors have created an environment where crude oil prices are expected to remain elevated, continuing to positively impact the profitability and share performance of refining companies.