Shares of oil and gas companies rallied on Thursday even as most other sectors were in the red in a choppy session. The sectoral gauge Nifty Oil & Gas jumped almost 2 percent during the day with oil prices hitting multi-year highs as US sanctions target Russian refiners. Gains were led by Adani Total Gas, Hindustan Petroleum, Oil and Natural Gas Corporation (ONGC) and GAIL (India).

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The sanctions targeting Russian refineries, disruptions to shipping, and a fall in US crude stocks to multi-year lows kept oil prices racing as Brent charged towards $120 a barrel, its highest in almost a decade.

Brent crude futures rose as high as $119.84 a barrel, the highest since May 2012, as US sanctions on refineries have raised concerns that Russian oil and gas exports could be targeted next against the backdrop of Russia and Ukraine’s war.

Shares of Adani Total Gas jumped settled 5 percent higher at Rs 1,751.25 on the National Stock Exchange (NSE). The stock of Hindustan Petroleum ended at Rs 279, up 4.5 percent from its previous close.

State-run GAIL(India)’s stock rallied 4.7 percent during the session to an intraday high of Rs 159.80. The shares finished 4.2 percent higher at Rs 158.95. The stock has increased investors’ wealth by 17.5 percent in the past five days as against the benchmark Nifty which has dipped close to a percent during the period.

Shares of ONGC rose more than 5 percent in intraday trade and settled 4.6 percent higher at Rs 170.45 on NSE. In the five-day period, the stock has given a return of more than 7 percent.

ONGC is among the few stocks that benefit from rising oil prices. JPMorgan has retained a 'buy' rating on the company as it expects its profitability to get a boost from the upsurge in oil and gas rates.

Also Read | Russia-Ukraine War: Can crude oil reach $130/barrel and will it cause a big blow to Indian market?

According to Vikas Halan, Associate Managing Director of Corporate Finance Group at Moody's Investors Services crude prices could move even higher from current levels.

If the Russia-Ukraine war prolongs then you could see oil in the range of USD 100-150 in the next couple of quarters, he told CNBC-TV18. He expects the prices to remain elevated for the next two to three years.

Peter McGuire, CEO of XM AUS, is of the view that there are chances of crude oil hitting the $125 per barrel level as there is chaos in the physical oil market and volatility on the upside is parabolic. He is among the experts who expect crude oil to be "very volatile" in the near term.

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