ONGC‘s share price was tumbling on Wednesday morning as oil stocks were under pressure due to the fall in Brent crude prices.

What Happened: Brent crude prices have dropped to around $69 per barrel, the lowest since December 2021. This decline is followed by the Organization of the Petroleum Exporting Countries (OPEC) decision to lower its demand outlook for 2024 and 2025.

In its September report, released on Tuesday, OPEC projected global oil demand to increase by 2.03 million barrels per day in 2024, a slight decrease from the 2.11 million barrels per day growth forecasted in the previous month.

For 2025, the demand outlook was further reduced to 1.74 million barrels per day, down from the earlier forecast of 1.78 million barrels per day.

See Also: ONGC Videsh, Oil India, KABIL Sign MoU With UAE’s IRH For Critical Mineral Supply Chain

Nuvama Institutional Equities maintained its “reduce” rating for the stock with a price target of ₹232. The target indicates an around 21% downside from the stock’s last closing price of ₹295.60.

The research firm said it was cautious outlook on ONGC, citing concerns over missed production targets and the recent drop in oil prices below the crucial $75 per barrel mark.

Despite market optimism, the brokerage views ONGC’s standalone oil and gas production growth targets of about 12% and 27% by FY27, primarily from the KG-98/2 block, with scepticism. Nuvama highlights that ONGC has failed to meet its production guidance every year for at least the past six years, raising doubts about its ability to achieve future targets and calling for caution among investors.

Price Action: ONGC’s share price was down 2% to trade at ₹289.70 as the markets opened on Wednesday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.