It's a strong day for ASX oil companies on the share market. Following weekend drone attacks targeting oilfields in Saudi Arabia, the price of crude oil has shot up double digits. West Texas Intermediate (WTI) crude has climbed 1.6% to US$60.68 a barrel while Brent crude is up 11.8% to US $67.35 a barrel at the time of writing.
These moves represent the largest one-day spike in oil prices since at least 1988 – Saudi Arabia (through the state-owned company Saudi Aramco) is the largest producer of oil on the planet and the attacks over the weekend have immediately cut global oil supplies by an estimated 5–6%.
Here's how some of the ASX oil stocks are reacting today (at the time of writing).
The Woodside Petroleum Limited (ASX: WPL) share price is up 4.93% to $32.90. This follows Friday's closing price of $31.32.
Meanwhile, Santos Ltd (ASX: STO) shares are up a respectable 3.79% to $7.67 after closing last week at $7.36.
Beach Energy Ltd (ASX: BPT) shares have bumped a meaty 6.77% to $2.68 after closing last week at $2.51.
Oil Search Limited (ASX: OSH) is bagging a 6.75% bump today, trading for $7.75 after ending last week at $7.24, while Caltex Australia Limited (ASX: CTX) shares are up a more modest 1.30% to $25.26
The 'Big Australian' oil producer BHP Group Ltd (ASX: BHP) is also having a healthy day, with BHP shares up 3.42% to $38.40.
However, it's not such a nice time for those ASX companies that rely on oil (and gas) as a business input. Qantas Airways Ltd (ASX: QAN) shares are down 4.30% to $6.12 today, while the BlueScope Steel Limited (ASX: BSL) share price has also fallen 2.15% to $12.54.
Oil is not the only commodity reacting strongly to the events of the weekend. The spike in global tensions surrounding the oilfield attack has sent the price of gold back up above US$1,500 an ounce. ASX goldminer Newcrest Mining Ltd (ASX: NCM) is up 2.98% today at $34.51 a share, while Northern Star Resources Ltd (ASX: NST) shares are 4.62% higher at $10.86.
Foolish takeaway
While I suspect the gold price movements are a temporary spike, we shall have to wait and see what the response from Saudi Arabia is to know what will happen next with the oil price. Saudi Aramco has enough reserve supplies to rapidly cover the production shortfall, but the company may want to keep oil prices high for a time to take advantage of higher prices. If this occurs, we may see the start of an ASX oil bull run.
