U.S. military action against Venezuela caused Indian oil shares to swing wildly on Monday, with Reliance Industries and ONGC showing opposite moves.
Market Reaction
On the BSE, the Oil & Gas index fell about 1% after climbing the day before. Reliance hit a record high of ₹1,611.20 but slipped to an intraday low of ₹1,588.70, a drop of just over 1%. ONGC rose to ₹246.55 before falling to ₹235.75, down more than 2%.
Why the U.S. Strike Matters
- Venezuela holds the world’s largest known oil reserves.
- A U.S. attack raises the risk of supply disruptions.
- Even though crude prices fell on the day, a longer conflict could push prices higher.
Impact on ONGC
Higher and more volatile Brent prices generally help ONGC because it produces crude oil. More revenue, better earnings, and stronger cash flow are expected if oil stays strong. The main risk is possible government actions, such as fuel‑price caps or extra taxes, if crude prices jump sharply.
Impact on Reliance
Reliance’s refining business reacts differently:
- Rising crude prices can squeeze refining margins because feedstock costs go up.
- However, the conflict widens the price gap between heavy sour crudes (which are cheaper) and lighter grades. This benefits complex refiners like Reliance that can process the cheaper heavy oil.
- Any cut in Venezuelan exports could tighten global fuel supplies, supporting margins for diesel and jet fuel.
- Reliance also earns a lot from its digital and retail arms (Jio and Retail), which are less affected by oil price swings.
Technical Outlook for Reliance
Analysts see a bullish pattern:
- Support near the rising trend line; price staying above key DEMA levels.
- Monthly chart shows a "cup‑and‑handle" shape, often a sign of a breakout.
- ADX above 20 and RSI above 60 point to strong upward momentum.
- Potential upside target: around ₹1,680.
- Suggested stop‑loss: ₹1,510.
Technical Outlook for ONGC
ONGC is facing short‑term pressure:
- Current price just above the weekly pivot at ₹235.
- Closing above ₹242 for the next two days would confirm a bullish turn.
- Immediate support: ₹235; near‑term resistance: ₹245.
- Long‑term investors may look at the ₹210‑₹220 range for buying dips.
- Strong resistance sits around ₹260‑₹280 for short‑term traders.
Takeaway for Investors
ONGC offers a direct play on oil price strength, making it a tactical pick if crude stays firm. Reliance provides a mix of refining upside and stable growth from its digital and retail businesses, giving a more balanced exposure.
Holding both stocks can let investors capture potential energy gains while keeping a safety net through Reliance’s non‑oil segments.
Remember, this is my perspective, not a prediction. Do your own research and consider speaking with a certified financial adviser before making any decisions.