Energy shares smashed after oil prices tumble lower on Saudi plans

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.

These growth shares, for example, could be great options right now.

Must buy growth shares to own in FY 2019 

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!