ASX 200 oil shares were falling today amid infighting within OPEC+ — the 23-member group of the world’s largest oil-producing nations.
For example, the Woodside Petroleum Limited (ASX: WPL) share price finished the day down by 1.87% and Oil Search Ltd (ASX: OSH) shares were 2.45% lower. Other ASX 200 energy shares that were down by around 2% included Ampol Ltd (ASX: ALD) and Beach Energy Ltd (ASX: BPT). These falls came within the context of a rising market. The S&P/ASX 200 Index (ASX: XJO) ended Wednesday’s session 0.9% higher.
OPEC+ quarrels hit oil prices
Today’s falls in ASX 200 oil shares came after OPEC+ nations cancelled their scheduled meeting due to an inability to agree on supply levels, as reported by Reuters.
OPEC+ (consisting of the 13 OPEC nations like Saudi Arabia and 10 other oil-producing nations including Russia) ministers abandoned discussions after Saudi Arabia and the United Arab Emirates could not reconcile their differing views.
Reuters reported analysts and traders fear the rift may lead to the UAE ‘going it alone’ and massively increasing its production. They also fear other OPEC nations may then follow suit. If the supply of oil increases, then its price will decrease.
ASX 200 oil shares, along with oil prices, boomed earlier this week as investors initially thought the breakdown in talks would be beneficial for the sector.
OPEC+ derives its market power from its ability to suppress production to inflate the price of the black liquid. The OECD defines the group as an anti-competitive cartel.
The current price of Brent crude oil is at US$74.50 per barrel. That’s a 0.15% fall from last week. In April last year, for the first time ever, crude oil was selling at an astonishing minus US$40.32 per barrel. Despite increasing climate change awareness, oil is still the most consumed energy product globally.
More on ASX 200 oil shares
Over the past 12 months, the abovementioned ASX 200 oil shares have fluctuated from +26% (Oil Search) to -14% (Beach Energy). The Woodside share price is around 11% higher and Ampol shares are 1.25% higher over the same period.
By market capitalisation, the largest of these companies is Woodside with a valuation of nearly $23 billion. The smallest is Beach Energy, which is valued at almost $3 billion.