It's a good day to own shares in ASX energy companies today. The Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO), Oil Search Ltd (ASX: OSH), and Origin Energy Ltd (ASX: ORG) share prices are all rising today. The companies' share price lift coming despite today's 1.08% fall in the S&P/ASX 200 Index.
The exception is Ampol Ltd (ASX: ALD), which has dropped 0.54% and is currently trading at $23.75.
At the time of writing, Woodside share price is up 2.07% to $25.20, Santos shares are selling 3.98% higher to be at $7.71, Oil Search lifted 3.33% to sit at $4.35, Origin shares are 1.14% higher, trading at $4.42.
Let's take a closer look at why all these share prices are through the roof.
What's lifting the ASX energy shares today?
As reported in the Australian Financial Review (AFR), crude oil prices are surging after OPEC+ members announced they would continue production cuts into April.
OPEC+ comprises the 13 OPEC nations (such as Saudi Arabia, the United Arab Emirates, and Nigeria) along with 10 additional countries (like Russia and Mexico). The group acts (and the OECD defines it as) as an anti-competitive cartel. Members coordinate with each other to cut the supply of oil and thus boost its price on the market.
In the AFR report, OPEC justifies the cut by claiming that "demand recovery from the coronavirus pandemic was still fragile…" The inter-government organisation is withholding approximately 7 million barrels per day (bpd) from the market. This is down from the record 9.7 million bpd withheld last year.
There is also speculation Saudi Arabia may cut an additional 1 million bpd of production. The move could bring the total cut to 8 million bpd.
The website Trading Economics has the current price of crude oil at USD 64.06. That's a 4.37% rise from last week.
In April last year, for the first time ever, crude oil was selling at an astonishing minus USD 40.32.
Despite increasing climate change awareness, oil is still the most consumed energy product globally.
Share price snapshots
Despite today's gains, all the companies listed here, with the exception of Santos, are at a lower share price than this time last year. In fact, Santos' current share price is a 52-week high.
One year ago, Woodside's share price was $27.31, Santos was $6.88, Oil Search was $5.10, Origin Energy was $7.00, and Ampol was at $32.80.
The market capitalisation of the respective companies is $24.3 billion, $16.1 billion, $9 billion, $7.8 billion, and $5.7 billion.
