ASX-Listed Oil & Gas Stocks Climb the Price Ladder As Oil Market sees an Undercurrent of Shift

3 min read | November 10, 2020 02:50 PM AEDT | By Kunal Sawhney

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ASX-Listed Oil & Gas Stocks Climb the Price Ladder As Oil Market sees an Undercurrent of Shift

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Summary

ASX-listed oil & gas stocks are picking some gains on the exchange as crude oil prices surge on the global front.

Vaccine development news, Biden’s win, and U.S. inventory drawdowns are pulling strings.

ASX-listed oil & gas stocks are gaining momentum over the changing dynamics on the international front with the S&P/ASX 200 Energy index gaining smartly from the levels of 6,262.90 (intraday low on 2 November 2020) to the present high of 7,275.20 (as on 10 November 2020 01:16 PM AEDT).

The surge in the oil & gas stocks is primarily supported by a rise in crude oil prices across the global front. The oil market is gaining momentum over the improved risk appetite, leading to money inflow in risky assets.

The recovery in the oil market is mainly due to a slight improvement in the oil demand, which the market anticipates will improve further as the vaccine development surfaces ahead.

During the evening trading session on 09 November 2020, Pfizer announced the latest development on the vaccine front with its latest trails being 90 per cent effective against the COVID-19 virus.

The positive news concerning the vaccine development led to a sentiment splash in risky assets, including crude oil, which further extended support to ASX-listed oil & gas stocks.

U.S. Frackers Back in Action

The U.S. 2020 Presidential Elections finally concluded with Joe Biden taking the oval office. The energy market has been under lens as the new president-elect has expressed his commitments towards supporting fracking.

U.S. frackers are back for backlogged drilled but uncompleted wells (or DUCs) with the number of active hydraulic fracturing surging 50 per cent since mid-September to stand at 127.

However, a considerable demand gap is holding the reins of the oil industry, but surely improved sentiments are working in favour of ASX-listed oil & gas stocks.

U.S. Oil Consumption Improves

As per the latest data available with the U.S. Energy Information Administration (EIA), the refinery inputs across the nation surged by 163,000 barrels per day to average at 13.6 million barrels per day (for the week ended 30 October 2020).

The surge in the refinery input along with a large inventory drawdown reflected upon improved demand, providing a cushion to the oil price.
For the week ended 30 October 2020, the U.S. commercial crude oil inventory witnessed a drawdown of 8.0 million barrels to stand at 484.4 million barrels, nearly 7 per cent below the five-year average for this time of year.

ASX-listed Oil & Gas Stocks

The above factors seem to be boosting the market sentiment around ASX-listed oil & gas stocks with many stocks following the lead from the oil market.

ASX-listed oil stocks such as Oil Search Limited (ASX:OSH) and Cooper Energy Limited (ASX:COE) have gained considerably from the recent surge in the oil market.

The positive news around the vaccine development is further pushing ASX-listed oil & gas stocks with some such as OSH standing among the top five gainers on the exchange (as on 10 November 2020 01:16 PM AEDT) with a 16.37 per cent gain; and others like Cooper Energy Limited (ASX:COE) showing a day’s gain of ~ 7.34 per cent.

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