The price of crude oil has surged since last week. The price of a barrel of West Texas Intermediate (WTI) is currently sitting at US $59.13, while Brent crude is fetching US65.45 a barrel. This represents an increase of 8.9% and 6.4% respectively week-to-date. Geopolitical tensions surrounding Venezuela, the US-China trade war as well as the US-Iran brinkmanship in the Middle East are amongst the factors influencing these higher prices.
Certainly assisting the price surge is a report on US oil inventories. According to the AFR, the amount of oil sitting in the US national stockpile fell by 12.8 million barrels last week, after fire damaged one of the US's largest refineries in Philadelphia. Most countries stockpile oil due to its strategic and economic importance and this news out of the US indicates that there could be further supply squeezes.
With all this international tension, let's take a look at how the ASX oil companies are fairing
Woodside Petroleum Limited (ASX: WPL)
The Woodside share price continues to nudge the ceiling of the $34-38 band that is has been trading within for most of the year. Woodside shares closed today at $37.15, which is close to flat for the week. Woodside shares briefly dipped below the $37 mark on Tuesday, nearly hitting $36.80, but have since rebounded to where they sit this afternoon.
Beach Energy Ltd (ASX: BPT)
Beach shares have responded to the surge in crude prices this week and are up 7.6% compared to last weeks price, closing the day at $1.98. Beach is one of the more volatile ASX stocks (probably due to its size and concentration on the energy market). To demonstrate this, Beach has a 52-week high of $2.27 and a 52-week low of $1.28 – a 77% swing. If current trends in the oil price continue, Beach is one of the stocks that is likely to appreciate with the most enthusiasm.
Santos Ltd (ASX: STO)
The Santos share price has been taking me back to math classes over the past few months – its moves around the $7 mark are reminiscent of a sine curve. STO shares have continued this pattern this week but have edged slightly higher and seem to be coalescing around the $7.20 mark, where it ends the trading day.
BHP Group Ltd (ASX: BHP)
Not normally what comes to mind when mentioning ASX oil stocks, BHP still derives almost 15% of its earnings from oil and petroleum. BHP makes the list this week as it has just hit a new 52-week high today of $42 and ends the day sitting at $41.95. BHP is now looking at a YTD gain of 24.55% and is now sitting at its highest levels since June 2011.
Foolish Takeaway
ASX oil companies have been responding well to these developments in the oil price partly due to the Australian dollar's current levels. If there is any further depreciation on our dollar or if oil breaks new ceilings, I expect that this will push share prices out of the comfort zone. It's going to be an interesting few weeks on the global stage, so keep an eye on crude prices going forward!
