Here’s how energy prices are driving Australian Energy Index

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Here’s how energy prices are driving Australian Energy Index

 Here’s how energy prices are driving Australian Energy Index
Image source: © Edhardream | Megapixl.com

Highlights

  • The S&P/ASX 200 Energy Index (XEJ) has gained 26.60% in the last 52 weeks.
  • Currently, XEJ stands at its multi-year resistance level, and it has been consolidating for the last one month.
  • Market participants would be closely monitoring the price action which is considered important by many technical analysts.

The Australian energy sector, the S&P/ASX 200 Energy Index (XEJ), is perhaps the real pandemic winner. The index, which tracks the performance of 200 largest energy stocks on the ASX by float-adjusted market capitalization, has gained 26.60% in the last 52-weeks.

On Monday, the S&P/ASX 200 Energy Index (XEJ) gained 0.27% to trade at 9,912.40. The significant rise has been witnessed due to a substantial gain in crude oil prices – the biggest influencer of the index amid the easing lockdown in China's Shanghai.

Also Read: Oil rises on tight supplies and weaker US dollar

While casting a glance at the multi-year chart, it looks like XEJ stands at its multi-year resistance level. The index has been nicely consolidating at this point for last one month.

S&P/ASX 200 Energy Index (XEJ) chart

S&P/ASX 200 Energy Index (XEJ) chart | Source: Refinitiv Eikon

The index has made significant corrections every time it reaches near the multi-year resistance level.

S&P/ASX 200 Energy Index (XEJ) chart

S&P/ASX 200 Energy Index (XEJ) candlestick chart | Source: Refinitiv Eikon

While looking at the short-term monthly candlestick chart, the index seems to be playing at an intermediatory support level. The index has dropped significantly from its multi-month highs, and has been trading at an inflection point with two red candlesticks.. At this point in time, market participants would be closely monitoring the price action which is considered important by many technical analysts.

Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars

ASX Energy Stocks

ASX-listed energy heavyweights have capitalised on the ongoing crude oil rally. Woodside Petroleum’s (ASX:WPL) share price has gained 27.53% so far in 2022. The stock traded 0.49% up at AU$28.91 per share on Monday.

Another significant O&G player, Santos (ASX:STO) has also gained as much as 21.36% in the last one year. The shares gained 1.24% on Monday in line with a rise in crude oil prices.

Also Read: Crude oil surges to 14-year highs on delays in Iranian talks

Apart from this, various other small- and mid-cap companies, including Paladin Energy (ASX:PDN), Beach Energy (ASX:BPT), and Whitehaven Coal (ASX:WHC) also logged significant gains in their share prices as of Monday.

Bottom Line

Australia’s energy index has gained more than 26.60% in the last one year. Currently, the index is trading at an intermediatory support level. The staggering jump in the index has been attributed to a solid recovery in energy prices including coal, crude oil, and natural gas. 

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