Oil prices gyrated on Tuesday as Ukraine peace talks made little headway and the prospect of a ban on oil imports from Russia triggered investor fears over inflation and slowing economic growth.

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President Joe Biden's administration is willing to move ahead with a US ban on Russian oil imports even if European allies do not, according to a Reuters report.

International oil benchmark Brent crude, which briefly hit more than $139 a barrel in the previous session, jumped around in morning trade and was up about 0.8 percent at $124.20.

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At 11 am, BSE Oil & Gas fell 1.54 percent to trade at 17,581.73. Nifty Oil & Gas was down 1 percent dragged by Adani Total Gas Ltd which fell close to 5 percent. ONGC fell 3.72 percent while GAIL was down 2.26 percent.

However, Indraprastha Gas Limited gained close to 10 percent. Mahanagar Gas was trading close to 8 percent higher while Gujarat Gas gained 6.50 percent. Petronet, BPCL, IOC gained close to 1 percent each.

Reports that IGL has announced a hike in prices of compressed natural gas (CNG) in the Delhi-NCR region also supported the upward momentum in gas stocks. The prices have been hiked by 50 paise per kilo in Delhi while Re 1 per kilo in the NCR region, the report said.

Harshvardhan Dole, Vice President-Institutional Equities, IIFL, said that higher crude prices are benefitting upstream companies like Oil and Natural Gas Corporation (ONGC), Petronet LNG and GAIL.

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"From a revenue model perspective, the upstream companies like ONGC, OIL and to an extent GAIL and Petronet LNG are clear beneficiaries of strong oil and gas prices," he said.

On Bharat Petroleum Corporation Ltd (BPCL), he pointed out that all the premium that the company enjoyed historically has evaporated.

German chancellor, Olaf Scholz, has pushed back against calls to ban Russian oil and gas imports, as part of western sanctions against Moscow over its invasion of Ukraine.

In a statement, Scholz cautioned that such a move could put Europe’s energy security at risk and that energy imports from Russia were currently essential to citizens’ daily lives.

"Oil has given a shock. We continue to maintain our stance that oil is now fundamentally getting weaker. Any news pertaining to Russia does impact oil prices. I continue to believe that oil fundamentally is now going to weaken quite significantly, once this geopolitical event is behind us. Medium to long term, we will be more bearish on oil than we ever were," said Sunil Singhania, Founder of Abakkus Asset Management.

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First Published:Mar 8, 2022 11:39 AM IST