Despite a general weakness in the overall sharemarket on Wednesday, Australia's oil and gas stocks are all firing up after the oil price rebounded overnight.
As reported by CNBC, the oil price rebounded from heavy falls in the previous session as a result of fighting that could threaten supplies from Libya's oilfields. This may have helped ease concerns over the market's oversupply situation, which has the United States almost overflowing with barrels of the resource.
After having tumbled nearly 5% on Monday night, Brent oil recovered 3% to be trading above US$60 a barrel, while West Texas Intermediate (WTI) closed nearly 2% higher to be trading above US$50 a barrel. While the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has fallen 0.5% for the day, here's how Australia's energy stocks are reacting.
- AWE Limited (ASX: AWE) is up 2.5%
- Liquefied Natural Gas Ltd (ASX: LNG) is up 0.6%
- Sundance Energy Australia Ltd (ASX: SEA) is up 1.9%
- Senex Energy Ltd (ASX: SXY) is up 3.5%
- Origin Energy Ltd (ASX: ORG) is up 1.1%
- Woodside Petroleum Limited (ASX: WPL) us up 0.3%
Before investors get too comfortable however, the sector is by no means out of the woods yet. The market is still heavily oversupplied and some experts are predicting oil prices could still fall to US$20 a barrel, which would wreak havoc on companies in the industry. Investors wanting to play it safe should avoid the sector altogether, for now.
