“Oil prices rose 3% on Monday, hitting the highest since early July 2015, as Saudi Arabia's crown prince cemented his power over the weekend with an anti-corruption crackdown, while the US rig count fell and markets continued to tighten,” the Reuters report suggests.

Oil India hit a 52-week high of Rs 382, up 3% on the BSE in intra-day trade, while ONGC rallied 3.5% to Rs 205.50 extending its 16% surge of the last one-month on the BSE. The stock is trading close to its 52-week high of Rs 212 touched on January 31, 2017 in intra-day trade.

Selan Exploration Technology (up 5% at Rs 259), Aban Offshore (up 3.5% at Rs 227), Jindal Drilling & Industries (4% at Rs 174) and Hindustan Oil Exploration (up 3% at Rs 110) from the private sector, trading higher in the range of 3% to 5%, as compared to 0.31% rise in the benchmark S&P BSE Sensex at 09:41 AM.

Higher crude prices will result in higher realisation for these oil exploration companies and result in increased profitability for them.

Analysts at Spark Capital remain positive on ONGC mainly led by their view of crude prices of $56/$60/bbl for FY18/19E - stock currently factoring in around $50/bbl crude price.

“While crude prices may inch higher to $65/bbl we do see chances of subsidy being imposed and hence do not see net realisations crossing $60/bbl, increase in gas prices from current $2.5/mmbtu to >$3/mmbtu by FY19E, production growth of 3% CAGR over FY17-19E – led largely by increase in gas production of 5% CAGR and increase in ONGC Videsh’s (OVL) earnings from Rs 1.3/share to Rs 2.8/share / FY19E,” the brokerage firm said in recent report on the company’s one-year outlook. It recommends ‘buy’ rating on the stock with 1-year target price of Rs 241 per share.