ASX 200 energy shares race higher after oil prices jump

Energy shares are starting the week strongly. But why?

| More on:
A graphic depicting a businessman in a business suit standing with his hand to his chin looking at a large red arrow pointing upwards above a line up of oil barrels againist the backdrop of a world map.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The market may be tumbling on Monday but that hasn't stopped the energy sector from charging higher today.

In morning trade, a number of ASX 200 energy shares are recording solid gains after oil prices jumped on Friday night.

Here's the state of play at the time of writing:

  • The Beach Energy Ltd (ASX: BPT) share price is up almost 3% to $1.58.
  • The Karoon Energy Ltd (ASX: KAR) share price is up 3.5% to $2.70.
  • The Santos Ltd (ASX: STO) share price is up 1.5% to $7.75.
  • The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.5% to $36.20.

Why are ASX 200 energy shares rising?

As mentioned above, investors have been buying ASX 200 energy shares on Monday after oil prices raced notably higher on Friday night's session. This was driven by rising tensions in the Middle East.

According to Bloomberg, the WTI crude oil price was up 5.8% to US$87.69 a barrel and the Brent crude oil price was up 5.7% to US$90.89 a barrel. This helped oil record its biggest weekly gain in almost two months.

Unfortunately for consumers (and central banks wanting to tame inflation), some analysts believe that oil prices could keep rising from here. This could mean even higher petrol prices in the near term.

According to the Financial Times, global energy strategist at Rabobank Joe DeLaura believes that "we're headed to $100 [a barrel] no matter what this quarter."

This sentiment was echoed by the head of commodity strategy at Saxo Bank, Ole Hansen. He said:

Prices could easily get a lot worse [higher] before we find some stabilisation. No one in the right frame of mind would hold a short position [in oil] when Israel has just ordered 1mn people to leave [northern] Gaza. That threatens a massive escalation.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

An oil worker in front of a pumpjack using a tablet.
Energy Shares

Up 41% since April, are Woodside shares a good buy today?

A leading expert delivers his verdict on Woodside shares and dividends.

Read more »

Happy man in high vis vest and hard hat holds his arms up with fists clenched celebrating the rising Fortescue share price
Energy Shares

Forget Boss Energy shares! This ASX uranium stock could be a sleeping giant

Globally significant potential.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Energy Shares

Why is this ASX 300 stock crashing 17%?

Why are investors hitting the sell button? Let's find out.

Read more »

An oil worker in front of a pumpjack using a tablet.
Energy Shares

1 magnificent ASX energy stock down 30% to buy and hold for decades

Let's see why this energy stock could be worth considering.

Read more »

An oil miner with his thumbs up.
Energy Shares

Why Beach Energy shares just came roaring back

Beach Energy shares are smashing the benchmark on Monday. But why?

Read more »

an oil refinery worker checks her laptop computer in front of a backdrop of oil refinery infrastructure. The woman has a serious look on her face.
Energy Shares

Earnings season begins! 6 ASX 200 energy stocks report on these dates

Let's find out when.

Read more »

A graphic depicting a businessman in a business suit standing with his hand to his chin looking at a large red arrow pointing upwards above a line up of oil barrels againist the backdrop of a world map.
Energy Shares

How Woodside shares smashed the benchmark returns in July

Woodside shares were up an impressive 12.5% over the month

Read more »

Image of a fist holding two yellow lightning bolts against a red backdrop.
Energy Shares

Does Macquarie rate Origin Energy shares a buy, hold or sell?

The broker raised its price target on the stock last month.

Read more »