Shares of paints companies like Asian Paints and Indigo Paints rose 6 percent on Wednesday as crude oil prices fell. Shares of market leader Asian Paints rose 4.5% to Rs 2,259 during the day. Similarly, shares of Shalimar Paints rose 4.6% to Rs 139.45.The decline is understood to have been caused by signs that there could be a possible solution to the dispute that has previously disrupted Libyan crude oil production and exports.Shares of Asian Paints, Indigo, Berger Paints, Deepak Nitrite, Alkyl Amines rose as Brent crude oil prices fell to $69.4 per barrel. Therefore, shares of paints, chemical and aviation companies were trading in the green. Moreover, oil prices have fallen due to reduced demand from China, which is considered the largest importer of Brent crude. The increase in the use of electric vehicles in China is said to have reduced demand for oil.Crude oil prices continued to fall for a second day in a row after falling more than 4 percent on Tuesday. US crude futures fell more than 0.5 percent.However, the decline in crude oil prices has posed challenges for oil drilling companies like ONGC and Oil India. These companies may face lower profits and lower margins. This is because the price of refined products may not fall at the same rate as crude oil, and the value of inventories purchased at higher prices may decrease.With global supply expected to exceed demand by 0.5 MMBPD in 2025, there is a greater risk of a decline in crude oil prices.However, JM Financials has forecast that Brent crude will fetch around $70 per barrel, as a sharp drop in oil prices could hamper US shale investment and strain Saudi Arabia’s fiscal balance.Crude oil is an important part of paint production. Crude oil is used in the production of raw materials such as solvents and resins. If the price of raw materials used for paint falls, paint companies beGaikwadLower raw material prices increase profits and improve margins. This allows for more flexibility in pricing policy. Fluctuations in oil prices directly impact the profitability of paint manufacturers.
Dr. Anupriya Gaikwad
For True to Life News Media Pvt. Ltd.