Oil & Natural Gas Corp (ONGC) shares have lost eight percent of their value in the past one month, despite the recent surge in crude oil rates.

ONGC, an explorer and producer of crude oil, natural gas and related value-added products, benefits from high crude oil prices.

Oil prices have remained strong for much of 2022 after beginning the year at multi-year highs with the benchmark Brent rate broadly holding above the $100-mark since Russia's invasion of Ukraine in late February.

On Thursday, crude oil rates declined around one percent but held on to much of the five percent surge of the previous day. Oil prices have seen wild swings in the past few sessions as investors weigh concerns about receding global growth against supply concerns and geopolitical tensions.

"ONGC also benefits from higher gas prices, and is among the few stocks that have already given good returns this year... Volatility in the oil market should ease once things normalise. We are in an unusual time, the kind not seen in 100 years or so, thanks to first the pandemic COVID-10, the lockdowns in China and the war in Europe," AK Prabhakar, Head of Research at IDBI Capital Market, told CNBCTV18.com.

ONGC has rewarded investors with a return of more than 35 percent in the past one year, a period that saw the benchmark Nifty50 rise 6.6 percent.

The government in March more than doubled the gas price from regulated fields to a record $6.10 per million British thermal unit, which is applicable till the end of September.

Prabhakar expects benchmark oil prices to cool off to $80-85 a barrel levels in the next one-and-a-half years.

The sharp reversal in oil prices comes after the situation more than two years ago, when the pandemic caused the risk of unprecedented demand destruction, Prashant Khemka, White Oak Capital Management, told CNBC-TV18.

“If everyone stayed at home, you can imagine that the demand destruction in various years of the economy - travel would go for a toss, the tourism and hotels industry would all go bankrupt if people were to stay locked up... Crude went to negative on a spot basis because people felt nobody is going to use oil, and you will have to pay big sums to store crude," he explained.

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