ASX Energy Stocks Rejoice as Black Gold Regains Strength

ASX-listed oil & gas stocks are gaining traction among investors, thanks to a strong recovery in crude oil prices. Oil prices have demonstrated a rally with brent crude oil futures climbing to a 52-week high of US$61.69 per barrel (as on 10 February 2021).

To Refer to Crude Oil Technical Analysis, Please Read: Crude Oil Prices Stall, Will the Northward Move Continue?

What’s Propelling The Oil front?

The oil market has now started to witness the impact of improved demand and the ongoing supply squeeze brought forward by OPEC to keep the oil market buoyant.

Moreover, improving global economic conditions are adding to the demand for oil, leading to a decline in stockpiles built during the economic slowdown instigated by the COVID-19 outbreak.

For instance, as per data from the United States Energy Information Administration (EIA), crude oil inventory across the US reached its lowest level since March 2020 for the week ended 29 January 2021 at 469 million (excluding strategic petroleum reserves).

Due to improved consumption, utilisation rates across US-based refineries are also increasing with the weekly utilisation rates reaching the highest level since March 2020 at 83 per cent (for the same period as above).

To Know More, Do Read: Crude Oil Rally Continues on Declining US Stockpile

Furthermore, oil consumption across China is experiencing a significant increase, on the back of a robust economic recovery and higher industrial activities.

How are ASX-Listed Energy Stocks Responding to the Changing Dynamics?

Over the last six months, many ASX-listed oil & gas stocks have regained the lost ground while cherishing shareholders with some healthy price gains and overall returns.

Crude oil has witnessed an impeccable recovery over the last four months, with the benchmark brent futures recovering from USD 36.64 per barrel (seen in October 2020) to the current high of USD 61.69 a barrel. The figure reflects a recovery of ~ 68.36 per cent, leading to some strong gains for ASX-listed oil & gas stocks.

Over the last three months, the ASX 200 Energy Index (benchmark index) has recovered 12.92 per cent on a closing basis, propelling the market sentiment around ASX-listed oil & gas stocks.

Many stocks such as Woodside Petroleum Limited (ASX:WPL), Oil Search Limited (ASX:OSH) and Beach Energy Limited (ASX:BPT) have posted strong price gains and returns.

Also, the trailing 10-month recovery in crude oil prices has improved the medium-term performance of several ASX-listed oil & gas stocks. Many players have even surpassed the total return of ASX 200 Energy Index over the past six months.

Data Source: EODHD/Others Eikon Thomson Reuters) (as on 11 February 2021)

Also Read: U.S. EIA Anticipates Crude Oil Production to Surpass 2019 Peak