Australian Energy Stocks Surge as Oil Prices Rise and Geopolitical Tensions Escalate

2 min read | August 16, 2024 12:20 PM AEST | By Team Kalkine Media

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Australian Energy Stocks Surge as Oil Prices Rise and Geopolitical Tensions Escalate — Image source: Shutterstock

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Australian energy stocks saw a notable increase, with the S&P/ASX 200 Energy Index (XEJ) climbing as much as 2.2% to reach its highest level since August 5. The sub-index is up 1.4% for the week and is on track for its best weekly performance since July 5, provided the current gains persist.

Oil Prices and Geopolitical Tensions Boost Sector

The rally in energy stocks has been driven by recent gains in oil prices. The increase in oil prices comes amid easing fears of a U.S. recession, following robust economic data, and growing concerns about a potential widening conflict in the Middle East. These factors have contributed to a favorable environment for energy stocks.

Key Energy Stocks Perform Strongly

Among the top performers in the sector, shares of Woodside Energy (ASX:WDS) and Santos (ASX:STO) saw gains of up to 2.6% and 2%, respectively, on Friday. The positive momentum in the energy sector also saw impressive performances from Deep Yellow (ASX:DYL) and Boss Energy (ASX:BOE), which rose by up to 5% and 3.8%, respectively. Deep Yellow’s shares hit their highest level since August 2 and are set for a third consecutive session of gains.

Despite the recent uptick, the S&P/ASX 200 Energy Index remains down 12.2% year-to-date as of the last close, reflecting a challenging year overall for the sector.

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