Woodside And Beach Face The Heat Of First Red Zone In Crude Oil In Four Months 

Woodside And Beach Faces The Heat Of First Red Zone In Crude Oil In Four Months 

Crude oil prices jolted in the market amid inventory gain in the United States. The Brent Crude Oil Spot dropped from the level of US$71.11 (Day’s high on 23rd May 2019) to the present level of US$68.06 (as on 24th May 2019 AEST 7:28 PM). The factor which exerted the pressure on crude oil prices was the gain in the U.S Crude Oil Stockpiles. The trident of inventory and renewable energy and oil player stance imposed its effect on the market.

The factor which supported the crude oil prices previously was the tension in middle east, which raised a supply concern in the global market, but the recent gains in U.S Crude Inventory since the beginning of May 2019 finally played off, and the prices took a jab.

The recovery in the United States inventory from the level of -4.0M barrels to the level of 4.7M barrels mitigated the supply concern from the global market, which in turn, exerted pressure on crude oil prices.

U.S. Weekly Crude Oil Inventory (Source: Thomson Reuters)

The Oil producers and explorers on the Australian Securities Exchange reacted sharply over the crude decline, and the prices of certain oil companies plunged on ASX.

Woodside Petroleum Limited (ASX: WPL)

The share price of the company reacted quickly over the steep decline in crude oil prices, and the stock dropped from the level of A$37.550 (day’s high on 22nd May 2019) to the present low of A$35.610 (day’s low today).

The company so far realised the gains in oil prices and surged on ASX. The recovery in crude oil prices from the level of US$50.41 (low in December 2018) to the level of US$75.72 (high in April 2019) pulled the share prices of the company. The shares of the company inched up from the level of A$29.330 (low in December 2018) to the current month’s high of A$37.545.

However, a negative month so far for crude oil corrected the share price of WPL in May 2019 from the level of A$37.545 to the present level of A$35.700 (day’s close on 24th May).

Beach Energy Limited (ASX: BPT)

The share prices of the company followed the same trajectory; the prices dropped from the level of A$2.130 (day’s high on 17th May 2019) to the present low of A$1.930 (day’s Low on 24th May 2019).

With every month uptick in crude oil prices in the past four months, the shares of the company surged. The prices increased from the level of A$1.275 (low in December 2018) to the level of A$2.270 (high in April 2019). However, the first monthly loss in crude oil prices so far jolted the share prices of the company, and the prices dropped from the level of A$2.270 to the present level of A$1.935 (day’s close today).

In a nutshell, the previous four-month consecutive gains in crude oil prices provided an impetus to the shares of WPL and BPT to increase; however, the first emerging red zone in the prices exerted pressure on the share prices of above-mentioned oil producers and explorers.


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