Australia's leading energy shares were among the worst performers on the Australian share market on Tuesday.
And unfortunately for their shareholders, this has been the case again today in morning trade.
Why are energy shares sinking lower?
Energy shares have come under pressure today after oil prices crashed lower overnight. According to Bloomberg, the WTI crude oil price fell 4.3% to US$66.39 a barrel and the Brent crude oil price tumbled 4.3% to US$76.41 a barrel.
The catalyst for these sharp declines was news that Saudi Arabia has pledged to meet any supply shortfall that occurs from Iranian sanctions. Saudi Energy Minister Khalid Al-Falih told the news outlet that OPEC and its allies are now in "produce as much as you can mode."
This comes after the world's biggest oil exporter has just boosted production to 10.7 million barrels a day, which is nearing an all time high for the country.
Here is the state of play in morning trade for a selection of Australia's energy producers:
The Beach Energy Ltd (ASX: BPT) share price is down 4% to $1.60.
The BHP Billiton Limited (ASX: BHP) share price is 0.8% lower at $32.53.
The Oil Search Limited (ASX: OSH) share price has dropped 2.5% to $7.93.
The Origin Energy Ltd (ASX: ORG) share price is down 3.2% to $7.32.
The Santos Ltd (ASX: STO) share price has tumbled 2.8% lower to $6.73.
The Woodside Petroleum Limited (ASX: WPL) share price is down 1.5% to $34.19.
Should you buy the dip?
Oil prices have been incredibly volatile this year and I don't expect things to change any time soon.
In light of this, I intend to continue to stay clear of energy shares for the time being and will focus on less risky opportunities that have emerged elsewhere in the market during the recent market volatility.
