Global crude oil prices are nearing three-year highs, with benchmark Brent averaging $78.8 per barrel in the second quarter of 2018. According to a report, this might result in a 124 percent increase in Profit after Tax for Oil and Natural Gas Corporation (ONGC) for the quarter.

"Due to increased average crude oil prices, we estimate realisations to grow Year-on-Year (YoY) and Quarter-on-Quarter (QoQ) to $71.5 per barrel. As a result, we predict PAT of Rs 6,446.9 crore, up 124% year on year and 48.7% quarter on quarter "ICICI Direct, an equity research firm, stated in a report.

This is despite the expected decline of 3.9 per cent and 8.7 per cent in ONGC's oil and gas production YoY, respectively. Oil production is estimated at 5.5 million tonne while gas production is expected at 5.4 million tonne in the quarter. Oil prices corrected at the start of August due to possible drop in global demand and Opec+ decision to reduce production cuts. Oil prices surged from August's end due to lower output following Hurricane Ida and a lower-than-expected increase in August production. Following that, the average price of crude oil jumped by $4.4 per barrel to $73 per barrel.

Fuel demand is predicted to rise YoY and QoQ for Oil Marketing Companies, as demand was impacted by travel limitations in the second quarter of last fiscal year and the first quarter of this fiscal year. Their marketing volumes are predicted to increase by 7-10% year over year.

Overall profitability for OMCs, however, is likely to fall year over year, as all companies benefited from inventory gains in the second quarter of the previous fiscal year. Indian Oil (IOC), the country's largest state-owned refiner, is expected to report a 33.6 percent reduction in profit for the quarter ended September, to Rs 3,944.8 crore.