ASX 200 Energy Sector Faces Decline Amid Oil Production Hikes

May 05, 2025 05:20 PM AEST | By Team Kalkine Media

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ASX 200 Energy Sector Faces Decline Amid Oil Production Hikes — Image source: Shutterstock

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Highlights:

The ASX ended its winning streak with a decline, driven by a drop in the energy sector.

Energy stocks, including Santos (ASX:STO), Karoon Energy (ASX:KAR), and Woodside Energy (ASX:WDS), faced notable losses.

The S&P/ASX 200 closed lower, with declines across all 11 sectors.

The Australian Securities Exchange (ASX) experienced a downturn on 5 May, with the S&P/ASX 200 index closing lower at the end of the trading session. The energy sector faced significant declines, contributing to the overall drop in market performance. The energy stocks, including companies such as Santos (ASX:STO), Karoon Energy (ASX:KAR), Beach Energy (ASX:BPT), and Woodside Energy (ASX:WDS), were particularly impacted as crude oil prices tumbled.

Energy Sector Impact

The energy sector, the day's worst performer, saw a significant drop after reports emerged regarding oil production plans by the Organization of the Petroleum Exporting Countries (OPEC). Saudi Arabia recently raised its oil output in response to some members' failure to comply with previous production cuts. This action resulted in a decrease in crude oil prices, which, in turn, affected the performance of energy companies listed on the ASX. Notable energy stocks such as Santos (ASX:STO) and Karoon Energy (ASX:KAR) saw losses during the session.

Santos (ASX:STO) ended the day in the red, with Karoon Energy (ASX:KAR) also experiencing a retreat. Beach Energy (ASX:BPT) and Woodside Energy (ASX:WDS) followed the trend, as their stock prices were impacted by the oil price slump.

Financial Sector Experiences Losses

The financial sector also saw a downturn, with Westpac (ASX:WBC) driving the decline after its interim earnings report for the first half of 2025 failed to meet expectations. This news contributed to a broader loss in the sector. The financial sector's decline was the second largest of the day, following the energy sector.

Gold and Materials: Mixed Performances

In contrast to the negative movement in energy, the materials sector displayed mixed performance, with coal miner Stanmore Resources (ASX:SMR) facing a significant drop. On the other hand, Gold Road Resources (ASX:GOR) bucked the trend, closing higher following a takeover bid. Other gold stocks, such as Vault Minerals (ASX:VAU) and Bellevue Gold (ASX:BGL), also showed positive gains.

Industrials Shine Amid Market Slump

The industrials sector stood out as the best performer of the day, continuing its upward momentum with a strong rally over the past few sessions. Despite the broader market weakness, industrial stocks showed resilience and helped offset some of the losses in other sectors.

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