If you own any ASX energy shares in your stock market portfolio, chances are they have been a bit of a drag in 2024 so far.
As it currently stands, the S&P/ASX 200 Energy Index (ASX: XEJ) has suffered a 19.4% loss year to date. That means that most ASX energy shares have had a rough year.
The ASX's largest energy share, Woodside Energy Group Ltd (ASX: WDS)? It's down 20.4% in 2024, having fallen from over $31 a share to the current $25.
What about Beach Energy Ltd (ASX: BPT)? This energy stock has dropped 22.5% this year. Santos Ltd (ASX: STO) has fared a little better, but is still down 13.7% since early January.
Being a coal share, as opposed to an oil producer, has not saved Whitehaven Coal Ltd (ASX: WHC) stock. This company has retreated by almost 16.5% year to date.
You get the picture. It hasn't been a great year to own ASX energy shares. Unless there is some kind of dramatic resurgence in the fortunes of energy companies in the next three or four weeks, this sector looks destined to notch up a sizeable loss for 2024.
But what about 2025? Will ASX energy shares see a bounceback next year?
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Will ASX energy shares stage a 2025 comeback?
Well, unfortunately, it's hard to say. Energy shares are one of the more difficult corners of the market to make predictions on, given how important global energy prices are to these companies' fortunes. Almost all ASX energy shares' profitability in a given year rests on what the prices of oil, coal and gas end up doing.
Oil prices, for example, have had a rough year in 2024. West Texas Intermediate (WTI) Crude has fallen from a high of almost US$87 a barrel in April to the US$68 levels we are currently seeing. Brent crude has had an even harder time, tanking from the US$91 per barrel levels we saw back in April to the US$72 price we have today.
This pretty much explains why ASX energy shares like Woodside have also seen their fortunes dim this year. This same paradigm will guide the fortunes of these companies over 2025 and beyond.
These prices are notoriously difficult to predict, given how volatile supply and demand for 'black gold' can be.
However, some ASX experts are bullish and reckon that energy stocks like Woodside might be a buy right now after their tough year. Late last month, my Fool colleague covered the views of ASX broker Morgans.
Morgans is expecting "the oil market to enter a deficit supply balance during 2H 2024". As such, it is predicted that the "oil market may be pricing in some demand destruction, but if that does not materialise, we expect to recover to >$80/bbl in the next 1-3 months".
If that does eventuate, expect to see ASX energy shares enjoy a flying start to 2025. Let's see if this turns out to be the case.
