The world’s energy systems are undergoing rapid transitions, and the Oil and Gas industry isn’t left behind. The Oil and Gas production in India has contributed significantly to the country’s economic growth by covering two-thirds of the primary needs. However, the country’s domestic oil and gas production is insufficient to meet its growing demand. Resulting in making India heavily dependent on imports. This led to an increased interest among investors to invest in the gas and oil shares of Indian companies.
In light of the changing landscapes, gas stocks and oil company stocks have become popular investment choices for business leaders and investors. Thus, in this blog, we’ll discuss some valuable insights about oil and gas share prices. So without further ado, let’s dive into the world of popular oil and gas company shares and understand why investors are keen on investing in this sector.
What are the Oil Shares of Companies?
Oil company shares are publicly traded companies involved in the exploration, production, refining, and distribution of oil and gas share prices. These oil shares usually engage in upstream activities such as drilling and exploration, midstream activities (transportation and storage), and downstream activities (refining and distribution of petroleum products).
The oil company share prices in the oil shares list are the prices at which these stocks are traded in the stock market. Thus, various factors affect the prices of oil shares, including the company’s financial performance, future growth prospects, and market trends.
Thus, you can invest in oil stocks through multiple means. Such as buying oil company stocks, investing in exchange-traded funds (ETFs) that track the oil sector’s performance, or investing in an oil and gas sector portfolio. Portfolio investing diversifies the risks of investing in multiple companies at the same time.
Investing in oil sector stocks provides you with an opportunity to benefit from the rising gas and oil share prices. However, it is important to note that investing in oil stocks can be volatile due to the cyclical nature of the industry and the impact of external factors on oil share prices.
Best Oil Sector Stocks
We have compiled a list of some of the most well-known and respected natural gas stocks in India and oil company stocks. Let’s take a look at them.
|Stock Name||Market Cap (in Cr)||Share Price|
|Reliance Industries Ltd||₹16,30,986.88||₹2,418.35|
|Oil and Natural Gas Corporation Ltd||₹2,30,156.21||₹183.65|
|Indian Oil Corporation Ltd||₹1,27,161.75||₹90.9|
|Bharat Petroleum Corporation Ltd||₹74,538.47||₹348.95|
|Hindustan Petroleum Corp Ltd||₹35,896.37||₹252.85|
|Oil India Ltd||₹30,141.04||₹280.55|
|Mangalore Refinery and Petrochemicals Ltd||₹17,157.94||₹97.1|
|Chennai Petroleum Corporation Ltd||₹6,331.71||₹429.95|
|Hindustan Oil Exploration Company Ltd||₹2,187.30||₹165.45|
|Asian Energy Services Ltd||551.08||₹145|
Note: The data is from 4th September, 2023. However, for real-time updates on stock prices and market trends, visit smallcase stocks collection today!
Oil and Gas Sector – A Synopsis
The Oil & Gas industry in India dates back to 1867, when oil was discovered at Makum near Margherita, about 8 miles from Digboi. Since then, the sector has come a long way. Thus, due to the growing gas fields in India, the Indian government has taken several steps to develop the industry and make it more self-sufficient.
The Ministry of Petroleum and Natural Gas, Government of India, closely regulates the oil and gas companies in India, covering all supply chain links. These include from exploration and production to refining, marketing, and distribution, as well as importation, exportation, and conservation.
Currently, the Indian oil and gas industry is transitioning towards cleaner and greener energy sources such as natural gas and renewables. Therefore, the government’s efforts to promote natural gas usage and increasing investment in renewable energy sources like solar and wind power indicate a move towards a more sustainable energy mix.
Looking ahead, the Indian Oil & Gas sector is projected to grow at a moderate pace, with crude oil share in India’s energy mix expected to decline gradually. However, oil stocks to buy could still present attractive investment opportunities for the investor. Therefore, companies in the Indian Oil & Gas sector are adapting to new challenges and exploring new opportunities to maintain their position in the market, indicating that the sector is poised for a transition period.
Disclosures for Green Energy smallcase
Oil and Gas Company’s Shares – A Brief Overview
Let’s review some gas and oil company share list in detail and decide who can buy oil stocks and which are the ones that will give returns.
Reliance Industries Ltd
Dhirubhai Ambani founded Reliance Industries in 1966. The Indian conglomerate is interested in petrochemicals, refining, oil and gas exploration, textiles, and retail. The company operates in India and internationally, with operations in the United States, Europe, Africa, and the Middle East.
- Low Risk: Stock is 1.77x as volatile as Nifty
- Largecap: With a market cap of ₹16,30,986 cr, stock is ranked 1
Oil and Natural Gas Corporation Ltd
Oil and Natural Gas Corporation Limited is also known as ONGC Ltd. It is one of India’s top oil and natural gas companies. Established in 1956, the company has exploration and production activity operations in India, Russia, Vietnam, and Sudan.
- Low Risk: Stock is 1.94x as volatile as Nifty
- Largecap: With a market cap of ₹2,30,156 cr, stock is ranked 24
Indian Oil Corporation Ltd
Indian Oil Corporation is a state-owned oil and gas company founded in 1964. The company specializes in refining, marketing, and distribution of petroleum products. The company operates in India and internationally, with subsidiaries in Sri Lanka, Mauritius, and the United Arab Emirates.
- Low Risk: Stock is 1.72x as volatile as Nifty
- Largecap: With a market cap of ₹1,27,161 cr, the stock is ranked 47
How to Invest in Natural Gas & Oil Shares in India?
Investing in oil & gas companies in India can be done through several avenues. First, you can open a trading account with a stockbroker and invest in publicly listed Indian oil and gas companies like ONGC, Indian Oil Corporation, or Reliance Industries, which have substantial energy divisions.
Additionally, you can explore mutual funds and exchange-traded funds (ETFs) that focus on the energy sector, offering diversification. For global exposure, consider investing in international energy companies listed on foreign stock exchanges through international brokerage accounts or ETFs that track global energy indices.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolio of stocks/ETFs, that are based on a theme idea or strategy.
- They’re created and managed by SEBI-registered experts,
- smallcase.com offers over 200+ stock portfolios, created by 180+ managers.
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
Factors Affecting the Oil Shares
Several factors can affect the performance of oil sector stocks and gas share prices, but here are four key factors that can have a significant impact:
- Supply and Demand: The most fundamental factor affecting oil share prices is the balance between supply and demand. Prices will likely fall if global oil production exceeds consumption, and vice versa.
- Geopolitical Factors: The oil industry is vulnerable to geopolitical risks, such as political instability, wars, and sanctions. These factors can disrupt oil supplies and cause oil shares’ price to spike.
- Environmental and Regulatory Factors: The oil sector is under increasing pressure from environmental regulations and social activism. For example, stricter environmental regulations could increase oil producers’ costs, leading to a shift towards alternative energy sources.
- Global Economic Conditions: The oil demand is closely tied to the global economy’s health. A slowdown in economic growth or a recession can lead to lower demand for oil and lower prices of oil shares, while strong economic growth can lead to increased demand and higher prices of oil shares.
Types of Oil Shares
The oil and gas industry is one of the largest and most influential sectors in the global economy, with many companies involved in every stage of the process. Therefore, these oil share prices are broadly categorized into three different categories that have been listed below:
- Upstream Stocks: These oil shares are primarily involved in oil and natural gas exploration and production. They are responsible for finding and extracting these resources from the ground. Oil and Natural Gas Corporation (ONGC) is an example of upstream stock.
- Midstream Stocks: These oil shares are involved in transporting and storing of oil and natural gas. They operate pipelines, terminals, and storage facilities that move these resources from production to refineries or other customers. Bharat Oil & Waste Management Limited is an example of a midstream stock.
- Downstream Stocks: These oil shares are refining and marketing oil and gas products. They take the crude oil upstream companies to produce and refine it into usable products such as gasoline, diesel, and jet fuel. They also distribute these products to customers such as gas stations and airlines. Indian Oil Corporation Limited (IOCL) is an example of downstream stock.
Benefits of Investing in Oil Shares
Investing in oil sector stocks can provide a number of potential benefits, from the consistent demand for energy to the potential for high dividends stocks. Thus, some of the other benefits of investing in oil shares include:
- Diversification: The oil sector can be a valuable addition to a diversified investment in oil portfolio, as it offers exposure to a different industry than traditional stocks, such as technology or healthcare.
- Potential for High Returns: The oil & gas companies can be highly profitable during periods of high demand and limited supply, leading to the potential for high returns for investors.
- Dividend Income: Many oil & gas companies pay dividends to their shareholders, which can provide a steady income stream.
- Inflation Hedge: The oil and gas stock prices tend to rise along with inflation, which can help investors protect their purchasing power over time.
- Geopolitical Stability: Some oil companies operate in politically stable countries, providing a relatively secure investment opportunity compared to other emerging markets.
Challenges While Investing in Oil Stocks
Every investment comes with its challenges and difficulties. Thus, let’s understand the two primary challenges while investing in oil company stocks.
- Price Volatility: The high degree of price volatility in the oil & gas companies poses one of the biggest challenges for those investing in oil stocks. A wide range of factors can affect oil share prices, including global supply and demand, geopolitical tensions, and natural disasters.
- Environmental Concerns: Another challenge facing investors while investing in oil stocks is the environmental impact of fossil fuels. As environmental awareness increases, stakeholders are pressuring oil and gas companies in India to reduce their carbon footprint and transition to sustainable sources. This can make it more challenging for oil shares to maintain profitability.
Mitigate Challenges with Energy Tracker smallcase
Now you’re aware of the challenges associated while investing in oil shares. You might want to know how we can diversify the risks involved. Fret not, you can track the performance of multiple oil company stocks by investing in Energy Tracker smallcase.
Energy Tracker Smallcase is an innovative investment product that enables investors to gain exposure to the energy sector in a diversified and efficient manner. It comprises a basket of stocks from various sub-sectors of the energy industry, including oil and gas exploration, renewable energy, and utilities.
This smallcase offers several compelling reasons like:
- The consistent demand for energy makes it a resilient investment option.
- Portfolio investing is practiced as it enables you to invest in a range of companies, thereby mitigating the risks.
- Offers a balanced exposure to the sector while including traditional and renewable energy companies.
To Wrap It Up…
To conclude, energy needs are growing faster as income levels and population both show rising trends in the country. Since renewable energy stocks are rising due to the government’s push for net zero emissions by 2070, investing in natural gas and oil shares can offer you attractive returns shortly. Therefore, consider your investment goals and risk appetite before investing in any natural gas shares price or petroleum stocks.
However, you can also invest in Energy Tracker smallcase to avoid the hassle of researching and choosing the best oil and gas company stocks.
According to recent data, here are the top 3 oil & gas companies to invest in – Reliance Industries Ltd, Oil and Natural Gas Corporation Ltd & Indian Oil Corporation Ltd. However, it’s important to do your own research or consult a financial advisor before investing.
You can invest in oil & gas stocks by opening an account with a brokerage firm and buying shares of oil & gas companies. Here are the steps involved:
1. Open an account with a brokerage firm.
2. Fund your account.
3. Research oil & gas companies and select the ones you want to invest in.
4. Buy shares of those companies.
According to several finance experts, it is a good time to invest in natural gas and oil shares due to its long-term growth.
Anyone can invest in Indian oil and gas companies, but there are some people who may be more suited to this type of investment than others. These include long term investors, those who are comfortable with risk and also the ones that want to earn extra.
Oil and Natural Gas Corporation (ONGC) is one of the largest oil shares of Oil industry and is considered to be of strategic importance to the Indian economy as it accounts for 71% of India’s crude oil production and 60% of its natural gas production.
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