AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Key Points:
- Australian energy stocks rise 2%, hitting their highest levels since August 28.
- The energy sub-index is up 3.6% this week, poised for its first weekly gain since March 1.
- Oil prices surged overnight amid fears that the Middle East conflict could disrupt global crude flows.
- Sector leaders Woodside Energy and Santos saw strong gains, up 2.9% and 2.3%, respectively.
- Despite this week’s rise, the energy sub-index is still down 12.2% year-to-date.
Australian energy stocks experienced a notable rise on Friday, with the energy sub-index (.AXEJ) climbing as much as 2% and reaching its highest level since August 28. This surge follows a strong performance throughout the week, with the index up by 3.6%, positioning it for its first weekly gain since March 1. The rally in the Australian energy sector is largely driven by a spike in global oil prices, as tensions in the Middle East have escalated, raising concerns about potential disruptions to global crude supplies.
The overnight surge in oil prices came as investors grew increasingly worried about the possibility of a widening regional conflict in the Middle East. The ongoing violence has intensified fears that it could interfere with global crude flows, sending oil prices higher in international markets. Australia, being a major producer of energy, is seeing its energy stocks benefit from these concerns. Rising oil prices tend to bolster the revenues and profit margins of companies in the energy sector, leading to a sharp uptick in share prices.
Among the top-performing companies in the Australian energy market are sector giants Woodside Energy and Santos. Woodside Energy (ASX:WDS) saw its shares rise by 2.9%, reaching their highest levels in a month. Woodside, Australia’s largest oil and gas producer, has been a key player in the country’s energy industry and continues to thrive on the back of stronger oil prices. This latest price surge has provided a much-needed boost to Woodside’s stock, which had seen some stagnation in recent weeks.
Santos Ltd (ASX:STO), another major player in the Australian energy market, also experienced significant gains. Its shares rose by as much as 2.3%, reaching their highest level since September 3. Santos, known for its substantial natural gas and oil operations, has been positively impacted by the rising demand for energy globally, especially as concerns over supply disruptions continue to grow. This sharp rise in Santos’ stock follows a period of muted performance, making this week’s gains particularly encouraging for investors.
While this week's performance has been strong, Australian energy stocks still have some ground to make up after a challenging year. Despite the recent surge, the energy sub-index is down 12.2% year-to-date as of Friday morning. The sector has faced headwinds throughout 2024, including fluctuating oil prices, geopolitical tensions, and environmental pressures. However, the potential for further oil price increases, especially in light of ongoing instability in key oil-producing regions, could support continued growth in the sector in the near term.
This week’s gains mark a notable shift in sentiment for the Australian energy sector, which had struggled to gain momentum for much of the year. The possibility of prolonged disruptions to global oil supplies is now prompting investors to take a more optimistic view of energy stocks. In particular, the uncertainty surrounding the Middle East conflict has heightened concerns over supply shortages, which, in turn, has provided support to oil prices and lifted energy stocks globally.
