- Turbulence in the oil market continued with brent crude price surging above US$100 on Wednesday.
- OPEC said that around 7 million barrels per day of Russian oil and gas could be lost due to embargoes or voluntary actions and they will stick to modest oil output rise.
Turbulence in the oil market continued on Wednesday with Brent crude price returning to above US$100 on easing concerns about demand in China after Shanghai relaxed some Covid-related restrictions. The Organisation of Petroleum Exporting Countries (OPEC) warned it would not be possible to increase the output enough to offset lost Russian supply and signaled it would not increase production anytime soon.
The intergovernmental organisation said that around 7 million barrels per day of Russian oil and gas could be lost due to embargoes or voluntary actions. On Wednesday, Brent crude rose by 0.2% to US$104.86 per barrel at 6:26 AM (GMT), while US (WTI) crude futures rose by 0.1% to US$100.68 per barrel as Western sanctions on Russia after it invaded Ukraine and supply concerns have impacted trade.
2022 Kalkine Media®
The oil-producing group said that it will stick to a modest oil output rise, as the highly volatile market was not due to supply and demand fundamentals but due to geopolitical factors. The group said that from May it will add 432,000 barrels of oil per day to the market, after the International Energy Agency (IEA) announced that it will infuse 60 million barrels from its stockpiles to cooldown the market. Last month, the US had announced release of 180 million barrel in the oil market.
Let us look at 3 FTSE-listed energy stocks that may get impacted from the rise in oil prices.
Shell Plc (LON: SHEL)
The multinational energy and petrochemical company recently announced that it may lose around US$4 to US$5 billion in Q1 after it suspended its Russian operations. With a market cap of £163,204.66 million, the FTSE 100-listed company’s share value has appreciated by 56.67% over the last one year and its year-to-date return stands at 35.47% as of 13 April 2022. Shell Plc’s shares were trading at GBX 2,197.00, up by 1.46% at 10:00 AM (GMT), as of 13 April 2022.
BP Plc (LON: BP.)
Global oil and gas company BP Plc has entered into an agreement with Eni to form a new independent company, Azule Energy through the combination of their Angolan business, with equal holdings.
With a market cap of £163,204.66 million, the FTSE 100-listed company’s share value has appreciated by 33.56% over the last one year and its year-to-date return stands at 20.74% as of 13 April 2022. BP Plc’s shares were trading at GBX 399.40, up by 0.87% at 10:00 AM (GMT), as of 13 April 2022.
2022 Kalkine Media®
Diversified Energy Company Plc (LON: DEC)
Independent oil and gas company Diversified Energy Company Plc is engaged in acquiring and enhancing primarily natural gas producing assets and related midstream infrastructure on the US onshore. The company has recently announced the acquisition of the Opgal EyeCGas 2.0, with EyeCSite Tablet software and the Semtech Hi-Flow 2 sampler, which makes it the first company in the US to deploy this advanced technology in natural gas upstream operations.
With a market cap of £1,007.81 million, the FTSE 250-listed company’s share value has appreciated by 1.14% over the last one year and its year-to-date return stands at 10.25% as of 13 April 2022. Diversified Energy Company Plc’s shares were trading at GBX 115.00, down by 2.95% at 8:05 AM (GMT), as of 13 April 2022.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.