STO, BPT, WHC: Why these energy shares are on a roll this year?

Highlights

• The energy sector was the top-performing sector on the ASX today, driven by a rise in oil prices
• The broader energy index S&P/ASX 200 Energy (Sector) XEJ was up over 1.5% at 10662.400 points in the afternoon trade
• Three ASX-listed energy companies-- Santos Limited, Beach Energy Limited, and Whitehaven Coal Ltd-- traded in the green today

The energy sector is the best performing sector on the ASX today. The S&P/ASX 200 Energy (Sector) XEJ was up over 1.5% in the afternoon trade outperforming the broader ASX 200 benchmark, which was down over 0.40% at the time of drafting this article. It is worth mentioning that eight of 11 sectors are trading lower today, where only three sectors – Energy, Consumer Staples and healthcare are in the green zone. 

So, why is the energy sector trading higher when most other sectors are down, resulting in losses in the broader market?

This could be because of the rise in oil prices. Brent crude prices moved above the US$120/barrel mark on Friday as traders felt OPEC’s decision to raise oil production by 648,000 barrels per day in July and August would do a little to ease oil prices as reopening of Chinese economy is expected to boost global oil demand.  

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Extending Friday’s gains, Oil prices rose over US$2 in early trade on Monday after Saudi Arabia hiked prices drastically for its crude sales in July. 

The surge in oil prices is primarily the reason why the energy stocks are faring well today and, to an extent offsetting the losses made by other sectors on ASX. In this context, let us look at three ASX-listed energy companies and their share price performance this year so far. This article will talk about three ASX-listed energy stocks, including Santos Limited (ASX:STO), Beach Energy Limited (ASX:BPT), and Whitehaven Coal Ltd (ASX:WHC).

Santos Limited (ASX:STO): 

Today, the share price of ASX-listed oil and gas producer Santos Limited was spotted trading 1.488% higher at AU$8.525 per share on ASX at 12:20 PM AEST. The company commands a market capitalisation of AU$28.45 billion. Santos is counted as one of Australia’s biggest domestic gas suppliers, and the energy company intends to become a leading Asia-Pacific LNG supplier. In the last one year, Santos shares have gained nearly 10.71%, while the stock is up almost 28.97% year-to-date (YTD).  Rising crude prices have mostly contributed to these gains.

At the beginning of this month, Santos said that it entered into new gas supply agreements with Yara Pilbara Fertilisers Pty Ltd (Yara) to supply natural gas to Yara’s liquid ammonia plant on the Burrup Peninsula in WA. As per the company’s announcement dated 1 June, Santos will supply over 120 petajoules of natural gas over the next five years, starting from 2023. 

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Beach Energy Limited (ASX:BPT):

Another oil producer Beach Energy Limited also traded higher today. Its’ shares were up 1.098% at AU$1.840 per share on ASX at 12:39 PM AEST today. Beach Energy Limited is an ASX-listed Australia-based oil and gas exploration & production company with a market capitalisation of AU$4.15 billion. As per the company website, Beach energy’s operations include a diverse portfolio, with onshore and offshore oil and gas production in five basins across Australia and New Zealand.

In the last 12-months, the share price of Beach Energy Limited has gained approximately 33.33%, while the stock is up almost 40.46% YTD.  

Whitehaven Coal Ltd (ASX:WHC):

Another ASX-listed energy stock Whitehaven Coal Ltd that produces premium-quality coal, traded 1.109% higher at AU$5.470 per share on ASX in afternoon trade. The company has a market capitalisation of AU5.49billion. The coal producer operates four mines in the Gunnedah Basin, NSW. The share price of Whitehaven Coal Ltd has gained up to 209.04% in the last one year, while the stock is up almost 98.19% YTD. Coal price stood at US$412.50 per tonne as of 3 June 2022. Boosted by continued robust demand amidst a tightening market backdrop in the last year, coal price has increased by 239.23%.  The stock hit a fresh 52-week high of AU$5.54 today.

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