Image source: Getty Images
Key points
- The ASX 200 energy shares make up the worst performing sector on Tuesday
- They're likely being weighed down by a dip in oil prices
- Additionally, one of its participants is struggling after announcing its production dropped over the December quarter
Tuesday is proving to be a bad day for many S&P/ASX 200 Index (ASX: XJO) shares. At the time of writing, the major index is down 3.03%.
It's being weighed down by the S&P/ASX 200 Energy Index (ASX: XEJ), which has currently slumped 4.25%. That makes it today's worst performing sector.
So, what's dragging ASX 200 energy shares down on Tuesday? Let's take a look.
ASX 200 energy shares suffer amid falling oil prices
The energy sector is suffering after the price of oil dropped overnight.
As The Motley Fool Australia reported this morning, the price of West Texas Intermediate oil fell to US$83.30 a barrel while most of Australia slept – representing a 2.2% drop. Meanwhile, the Brent crude oil price slumped 1.8% to trade at US$86.28.
According to reporting by CNBC, the dip was due to a strengthening United States Dollar, concerns of rising interest rates, and increasing tensions in Ukraine.
The energy commodity's drop in value has likely put pressure on ASX 200 oil producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL), as well as oil and gas engineering group Worley Ltd (ASX: WOR).
Their share prices have fallen 4.9%, 3.6%, and 5.7% respectively.
Meanwhile, the sector's biggest weight is struggling after it announced a drop in production.
The Beach Energy Ltd (ASX: BPT) share price is 7% lower after the company announced that its production fell during the December quarter. The drop was due to natural field decline, planned maintenance, and unplanned downtime.
Additionally, its sales volume fell 5% quarter-on-quarter while higher oil prices saw it bringing in 3% more revenue.
Other ASX 200 energy shares in the red today include Ampol Ltd (ASX: ALD) – down 2.8%, Origin Energy Ltd (ASX: ORG) – down 3.7%, and Whitehaven Coal Ltd (ASX: WHC) – down 1.7%.
