Energy stocks rise as Russian supply issues boost oil prices
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The news: Energy majors gained on the ASX as global oil prices reached their highest level since October 2023, buoyed by Russian supply concerns.
The numbers: US West Texas Intermediate crude rose by 75 US cents ($1.15), or 0.9%, on the New York Mercantile Exchange to settle at USD83.47 ($127.73) a barrel. This was its highest level since 27 October 2023. Brent crude settled 0.6% higher at USD87.38 a barrel — its highest close since 31 October.
In the local market, energy was the best performing sector on the ASX, lifting 1.01% by 1:15pm AEDT, with Woodside Energy (1%), Santos (0.5%) and Ampol (0.9%) all trading higher.
However, other Australian oil and gas companies lost ground — including Origin Energy (-0.1%) and Beach Energy (-1.6%). Meanwhile, gains by coal miners Whitehaven Coal (3.2%) and New Hope (3.3%) helped to boost the sector.
The context: Oil prices climbed as Russian crude supply continues to be hit by Ukraine attacks on its oil infrastructure. In recent months, Ukraine has increased its attacks, with at least seven Russian refineries targeted by drones in March alone. According to Reuters, the attacks have reduced Russian refining capacity by 7%, or around 370,500 barrels per day.
Earlier this month, oil prices were also reinforced by the decision by Organization of the Petroleum Exporting Countries plus (OPEC+) members to extend voluntary oil output cuts of 2.2 million barrels per day into the June quarter.
The source: Reuters
