Australia's energy stocks are mostly trading higher today following a rebound in oil prices overnight.
Brent crude, which is the global benchmark, managed to regain roughly US$1 to US$57.80 a tonne while West Texas Intermediate (WTI) crude, which is the US benchmark, regained roughly 0.7% to US$50.79 a barrel. That comes after oil prices suffered their worst single session loss on Wednesday night where both contracts fell by roughly 6%.
Last night's rebound came as a result of continued uncertainty regarding an agreement on Iran's nuclear program. The market had feared that, had an agreement been reached, Iran would have flooded the already-saturated global marketplace with another 30 million barrels of oil. Meanwhile, strong German economic data also indicated an increase in industrial output which helped bolster the resource's price further.
With the exception of BHP Billiton Limited (ASX: BHP) and Liquefied Natural Gas Ltd (ASX: LNG) (down 0.8% each), most other stocks in the sector are trading higher today. Senex Energy Ltd (ASX: SXY) has risen 3.2%, while Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG) have jumped 1.5% and 1.1% respectively.
Despite today's lift, investors need to be aware that most analysts believe oil prices are yet to have bottomed out. Any further falls in the resource's price will lead to significant volatility within the industry and could result in enormous losses for those investors holding shares within the sector. As such, investors would be wise to remain on the sidelines, for now.
