Energy stocks lead gains on the ASX as oil prices steady
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The news: Energy stocks led gains on the ASX as global oil prices lifted, with Morgans analysts making upgrades across a number of Australia's oil and gas majors.
The numbers: Energy was the highest performing sector on the Australian stock market, climbing 0.79% by 2:55pm AEDT, as Beach Energy (4.32%) Karoon Energy (4.29%), Cooper Energy (2.6%), Woodside (1.53%) and Viva Energy (1.09%) led the charge.
Global benchmark Brent Crude climbed 1.6% on Monday to trade close to USD87 ($133) a barrel, as West Texas Intermediate moved above USD82.
The context: The biggest rise in global oil prices in a week came as delegates of the OPEC+ group, which includes the Organisation of the Petroleum Exporting Countries, are set to affirm its policy of production cuts at a review meeting next week, Bloomberg reported.
In the local market, Morgans analysts upgraded Woodside from 'hold' to 'add', describing it as "now our top pick in energy". They noted the oil and gas giant had made "substantial progress" in the last six months, including securing approvals to resume work at its key Scarborough project, staying within its development budgets on its growth projects, and maintaining an attractive shareholder return profile.
Today, Woodside completed the sale of a 10% non-operating participating interest in the Scarborough Joint Venture to LJ Scarborough (LNG Japan).
Morgans also upgraded Beach Energy from 'hold' to 'add' after production increases across its existing portfolio that was in line with guidance, and associated decreases in unit production costs. It also viewed Beach Energy's proposition as attractive, particularly under new management.
Meanwhile, Morgans maintained its 'add' ratings for ASX oil and gas rivals Karoon Energy and Cooper Energy.
The sources: Morgans research, Bloomberg
