Which stocks would benefit during falling Crude Oil Prices?

Which stocks would benefit during falling Crude Oil PricesWhich stocks would benefit during falling Crude Oil Prices?

Crude Oil prices have fallen from $ 100 per barrel to $ 70 per barrel. Last week, such Crude Oil fell below $ 66 per barrel. Since India is the biggest consumer of Crude Oil, it would be the biggest gainer if Crude Oil Prices fall. Which companies would benefit from falling crude Oil Prices? Which stocks you should target and buy during such fall in Crude Oil Prices?

Which sectors would benefit from falling Crude Oil Prices?

Before we move to specific stocks, we should understand which sectors that would benefit from the fall in Crude Oil Prices. There are several sectors which would benefit from the fall in prices of Crude Oil directly or indirectly. It includes Oil marketing companies, Aviation sector, Painting sector, consumers of packaging material etc.,

Also Read: Top Stock Brokers offering 3-in-1 Trading and Demat Account in India

Which stocks would benefit during falling Crude Oil Prices?

While there are several stocks to buy when prices of Crude Oil fall, you can keep track of the following stocks which would benefit significantly.

a) Stocks that would benefit from Painting Sector

Companies from painting sector would be the biggest gainers during fall in Crude oil prices. Since raw material costs reduces, such companies' profits would show significant improvement.

Asian paints would be one of the biggest gainer in falling crude oil prices. Apart from large companies like Asian paints, mid sized companies like Berger Paints too  benefits from falling crude oil prices. You can keep track of such companies and invest.

b) Stocks that would benefit from Aviation Sector

Another major consumer of Crude Oil is Aviation Sector. Fuel cost is the major cost of aviation companies. Private companies in Aviation sector has been incurring losses with heavy competition. Some are making marginal profits. They have been offering special discounts. Crude Oil Prices fall would help such companies to increase profits.

Companies like Jet Airways and Spice Jet would have a good improvement in their margins due to fall in crude oil prices. Fall in Crude Oil prices from $ 100 to $ 65 (over a period of time) has reduced the  costs by 30%-35%. This would straight away adds to the profits. Such abnormal profits are either distributed to shareholders as profits are used for company expansion purpose. Note that Spice Jet share price is falling in last couple of days due to shut down for some of its flights across cities. Investors should review  such companies before investing.

c) Stocks that would benefit from Oil Marketing group

Direct oil marketing companies like BPCL or HPCL would have significant impact for fall in crude Oil Prices. Profits for such companies would boost like anything. While there are several other companies, I have picked-up only some of the top companies in this area.

Also Read: How Price-to-Earnings (P/E) ratio would help you determine whether a stock price is under priced or over priced?

What points investors should note before investing in such stocks?

Fall in Crude Oil prices is due to several economic and global factors. The downturn from $ 100 per barrel to $ 65 per barrel may not sustain for long term. It can bounce back to some extent. Due to fall in Crude Oil prices, several such stock share prices are hitting 52 weeks. If you are a short term to medium term investor, considering to invest in such stocks could be a good bet. If any such stock prices are seeing some correction, investors can invest through Systematic Equity Plan (SEP) every month.

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Which stocks would benefit during falling Crude Oil Prices


  • Rakesh

    UAN 100299701831vFY1Qb

  • Akshay

    Hi Suresh,

    Thanks again for another wonderful article. I am planning to invest my money in mutal fund / stocks right now which are connected to oil. Can you suggest some funds/stocks which I can buy at a lower price now and whose price will increase when oil prices increase?


  • khanra

    Hi Suresh ji,

    • Please suggest for best sip in share/sock for long terms.
    • Govt share is good or bad

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