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Summary
- Crude oil prices spiked during the evening session on 2 November 2020 with Brent futures surging ~ 8.85 per cent.
- S&P/ASX 200 Energy responds well to the crude oil price surge with the index gaining ~ 4.82 per cent on an intraday basis (11:39 AM AEDT).
- BPT inks an Asset Sales Agreement with Senex Energy Limited (ASX:SXY) to acquire the Cooper Basin portfolio of assets.
ASX-listed oil stocks are gaining momentum after crude oil prices spiked in the international market during the evening trading session on 2 November 2020.
The Brent crude oil futures surged from its intraday low of USD 36.04 a barrel to settle near the day’s high at USD 39.23 per barrel, marking an intraday gain of ~ 8.85 per cent.
ASX-listed energy stocks like Beach Energy Limited (ASX:BPT), Woodside Petroleum Limited (ASX:WPL), and Oil Search Limited (ASX:OSH) are on a strong footing on the exchange.
Crude Oil Spikes Over Market Dynamics
The oil market appears to be metamorphosing into a balanced state, thanks to a considerable adjustment in the supply chain by OPEC and allies, which along with extended support received by the cartel from other major oil-producers such as Kuwait, is keeping the market sentiments buoyant.
- At present, the oil cartel and the ally Russia plan to extend the oil supply cuts of ~ 7.7 million barrels per day into next year as fuel demand remains depressed on the global scale due to COVID-19 impact on economic activity.
- While the OPEC plans to keep a check on the supply side dynamics, the extended support received by the organisation is further fanning the market sentiment around crude oil prices.
- Recently, Kuwait suggested that it would support any decision of OPEC and its allies concerning supply polices.
Khaled al-Fadhel, Kuwaiti Oil Minister, mentioned to the local media that his country would support all OPEC+ efforts to balance the oil market.
S&P/ASX 200 Energy
The S&P/ASX 200 Energy is responding to global cues with the index marking a gain of ~ 4.82 per cent (11:39 AM AEDT) against its previous close on ASX.
The surge in the underlying energy index is well supported by individual stocks with many currently placed among the top five gainers of the day.
Beach Energy Limited (ASX:BPT)
- BPT inks an Asset Sales Agreement with Senex Energy Limited (ASX:SXY) to acquire the Cooper Basin portfolio of assets.
- Post the completion of the agreement, BPT will be the sole operator in the Western Flank and associated infrastructure.
- The deal entered by the Company marks a consideration of $87.5 million in cash, effective from 1 July 2020.
The acquisition is estimated by the market to expand the comprehensiveness of the oil & gas producer in the South Australian Cooper Basin by providing the Company with a 2P reserve of 6.8 million barrels of oil equivalent.
The stock of the Company last traded at $1.235, up by 7.39 per cent (11:39 AM AEDT) against its previous close on ASX.
