The Motley Fool

ASX energy shares on watch after oil prices spike

Oil prices spiked at the end of last week and look set to give Australian energy producers a major lift on Monday morning.

This follows the launch of an airstrike by the United States at the Baghdad International Airport which killed Iran’s General Qasem Soleiman. He was the leader of a special forces unit of the Islamic Republic’s elite Revolutionary Guards.

According to Bloomberg, oil prices climbed to their highest levels since April 2019 on Friday amid fears that escalating geopolitical tensions could disrupt Middle East crude supplies. The WTI crude oil price rose 3.1% to US$63.05 a barrel and the Brent crude oil price stormed 3.6% higher to US$68.60 a barrel.

This looks set to send the shares of energy producers such as Beach Energy Ltd (ASX: BPT), Oil Search Limited (ASX: OSH), Santos Ltd (ASX: STO), and Woodside Petroleum Limited (ASX: WPL) higher later this morning.

Where next for oil prices?

If the situation continues to escalate, then experts believe oil prices could push notably higher from here.

According to CNBC, analysts at political risk consultancy Eurasia Group believe Iran will retaliate to this airstrike and cause further spikes in the oil price.

It said: “We expect moderate to low-level clashes to last for at least a month and likely be confined to Iraq. Iranian-backed militias will attack U.S. bases and some U.S. soldiers will be killed; the U.S. will retaliate with strikes inside of Iraq.”

It expects oil prices to hold at around US$70 a barrel, “but could make a run at US$80 if the conflict spreads to the oil fields of southern Iraq or if Iranian harassment of commercial shipping intensifies,” it added.

Gold price jumps.

It isn’t just oil prices jumping on the news. Increasing demand for safe haven assets has sent the gold price hurtling higher as well.

On Friday the spot gold price pushed a further 1.6% higher to US$1,552.40 an ounce, much to the delight of the shareholders of Newcrest Mining Limited (ASX: NCM), Resolute Mining Limited (ASX: RSG), and the rest of the gold miners.

Not sure about energy or gold shares? Then check out these highly-rated blue chip shares which I would buy today.

Our Top 3 Blue Chip Shares To Buy Now

You’re invited! For a limited time, The Motley Fool Australia is giving away a fantastic FREE report detailing our 3 TOP BLUE CHIP SHARES to buy and own for now and beyond!.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping grossed-up dividend of over 6%! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

Simply CLICK HERE FOR YOUR FREE REPORT!

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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!