Despite recent volatility, the Beach Energy share price has still gained over the past 3 weeks. Here’s why

It’s been a good few weeks for Beach Energy shareholders…

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Key points

  • Beach Energy shares continue their bull run, despite a recent pullback
  • The downside is matched by price action in the oil and gas markets, driven by macroeconomic catalysts 
  • The Beach Energy share price has climbed 30% into the green this year to date

The Beach Energy Ltd (ASX: BPT) share price has sailed northwards these past few weeks. Despite the upside, its shares have also displayed wide volatility during this time and are currently down 4.68% at $1.63 in early trade today.

In broad market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) has followed a similar path, having soared more than 30% this year to date, despite a recent pullback.

TradingView Chart

What’s up with the Beach Energy share price?

The Beach Energy share price was dancing around the $1.50–$1.70 level in April before a breakout in late May.

Surging markets for energy-based commodities have transposed over to ASX energy shares, with Beach nudging past its 52-week high around one week ago.

Brent crude oil continues its charge upward, now trading 8% higher in a month to US$119 per barrel. It’s surged around 63% in one year.

Meanwhile, natural gas continues to run higher, despite a sharp pullback over the last week or so.

The price action in these markets so far this year almost certainly mimics the activity in the Beach Energy share price, as seen below.

Beach is a price taker on these commodities, so it stands to reason its share price will fluctuate with volatility in the oil and gas markets.

TradingView Chart

Driving the rally in energy markets are a number of macroeconomic pressures, including supply chain bottlenecks, demand and supply mismatches, and the conflict in Europe.

Adding fuel to the fire is that Saudi Arabia, the world’s largest oil exporter, raised its oil prices for Asian customers – its biggest market.

This comes on the back of a stronger demand outlook from China, now the most recent spade of COVID-19 lockdowns look to be easing.

The Beach Energy share price has climbed 22% over the past 12 months and around 30% this year to date.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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