By Puneet Sikka
Investing.com -- ONGC (NS: ONGC ) stock rallied today by more than 10% despite the broader market Nifty increasing by only 0.74%. In the past month also, the ONGC stock price has spurted by 31%. This growth can simply be credited to one factor -- higher crude oil prices.
The crude prices hit their 3 year-high recently as OPEC+ decided to increase the oil supply by only 400,000 BPD in November as earlier planned. Global economic recovery has continued to gather pace, which is why we are seeing a surge in demand for oil and its products.
Crude prices are also supported by the fact that natural gas prices have seen an unusual jump, which is why some electricity producers are shifting from natural gas to oil-based products, which means more demand for oil. Brent oil has already breached the $80 level per barrel.
The surge in oil prices helps upstream companies such as ONGC as an improvement in oil and gas realization helps these companies achieve higher earnings.
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