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Highlights
- Qantas shares jump on oil price outlook
- Brent crude drops on OPEC+ move
- Positive sentiment lifts (QAN)
Shares of Qantas Airways (ASX:QAN) saw a significant boost in early trading after oil prices took a hit following supply revival plans announced by OPEC+. The global oil alliance's decision to ease supply constraints has fueled expectations of cheaper crude, a key cost input for airlines.
During Monday’s session, Brent crude fell sharply by 3% to US$59.43 per barrel. This downward shift provided immediate relief for the aviation sector, particularly for fuel-intensive carriers like Qantas. By around 11:30 am, Qantas shares had surged by over 4%, settling at a 3.8% gain in the mid-morning session.
The move comes as energy analysts adjust forecasts for global oil benchmarks. Leading investment institutions have now revised Brent price estimates to an average of US$60 per barrel for the rest of the year, with a further drop expected to US$56 by 2026. These revised projections signal a potential reduction in operating costs for airlines.
Qantas, as one of the more fuel-sensitive companies on the ASX200, typically responds quickly to changes in crude oil prices. When prices climb, the airline often introduces fuel surcharges to its ticket pricing. A dip in oil prices, however, can strengthen the company’s profit margins and support investor confidence in the stock.
Airlines are particularly sensitive to changes in fuel prices, given that fuel can represent up to 30% of total operating expenses. With Brent now trending below the US$60 mark, the outlook for travel companies has brightened, especially those positioned for domestic and regional recovery.
Market watchers also view Qantas as part of a broader trend among ASX dividend stocks. The airline has previously returned value to shareholders through capital returns, and improving margins could strengthen its capacity to continue doing so over the long term.
The recent price movement adds to a generally positive sentiment around the travel sector, aided by stabilising oil prices and renewed consumer demand. For investors tracking the ASX200, the performance of stocks like Qantas plays a vital role in gauging the strength and direction of the broader market.
