Oil and gas stocks lead energy sector sell-off
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The news: Oil and gas stocks traded lower in morning trade on the ASX following a sharp drop in benchmark oil prices, with Israel set to discuss a US-mediated ceasefire deal with Hezbollah.
The numbers: Karoon Energy (-3.3%), Santos (-2.5%), Beach Energy (-2.3%) and Woodside Energy (-1.6%) were all down by 11:20am AEDT, as Ampol added 0.7%.
Energy, down 1.2%, was the worst performing sector on the ASX as the wider market dipped 0.27%.
US West Texas Intermediate was down 0.25% to USD68.77 ($106.36) a barrel after losing 3.2% on Monday, while Brent crude edged up 0.1% to USD72.55.
The context: Oil steadied after a sharp fall in the previous session as Israel and Hezbollah appear to edge closer to a cease-fire agreement, softening the risk of disruptions to crude supply in the region, Bloomberg reported.
Meanwhile, Morningstar lowered its fair value estimate on Woodside by 11% to $40, following increasing sustaining capital expenditure intensity by the biggest ASX-listed oil and gas play.
Elsewhere, incoming US President Donald Tump said he plans to introduce tariffs on China, Mexico and Canada on 20 January.
The sources: Bloomberg, Morningstar research
