Why did ASX 200 energy shares soar today?

We check what’s going on with ASX 200 energy shares after a fine start to the week.

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Key points

  • ASX 200 energy shares rose on Monday
  • A new resources and energy quarterly report is predicting Australia's commodity export earnings to rise in 2022-23 
  • The outlook for energy commodities "remains strong" according to the report

ASX 200 energy shares enjoyed a stellar day on the market today amid a positive outlook for energy exports.

The New Hope Corp Ltd (ASX: NHC) share price closed 7.78% higher on Monday while fellow coal share Whitehaven Coal Ltd (ASX: WHC) finished 2.56% ahead. Meanwhile, oil and gas producers Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) gained 2.66% and 3.33% respectively.

The broader S&P/ASX 200 Energy Index (ASX: XEJ) pulled ahead 2.62% today.

Let’s take a look at what could have been fuelling ASX 200 energy shares today?

Energy export earnings predicted to increase

Australia’s resource and energy export earnings are forecast to rise to $419 billion in 2022-23, a new government report reveals. That’s another $14 billion on the previous year’s earnings.

In a quarterly report, the Department of Industry, Science and Resources said resource and energy earnings would hit a new record between 2022 and 2023. The report said the surge is being driven by high prices, volume gains, and the weak Australian dollar, adding:

The outlook for Australia’s mineral exports remains strong, as energy shortages persist and the world economy rebounds from the impact of the COVID-19 pandemic.

Specifically, the report highlighted thermal coal prices “remain elevated” due to extreme weather and COVID-19 staff disruptions. Russia’s invasion of Ukraine was also cited as a factor contributing to the rise. The department added:

Record prices are expected to see export values reach $39 billion in 2021-22, with a peak in 2022-23 and a subsequent (price-driven) easing to around $31 billion by 2023-24

With regard to gas, the document estimated Australia’s LNG export earnings more than doubled from $30 billion between 2020-21 to $70 billion in 2021-22. It further predicted LNG spot prices would reach $84 billion in 2022-23.

Meanwhile, metallurgical coal prices are predicted to peak higher than $60 billion in 2022-23 before pulling back to $41 billion between 2023-24. The report said:

Metallurgical coal prices remain at historic highs, pushed up by supply disruptions and market uncertainties as a result of the fallout from the Russian invasion of Ukraine. 

The report also suggested Australian oil export earnings have lifted 81% to $13.5 billion in 2021-22. These earnings are predicted to hit $14.3 billion in 2022-23 before retreating to $12.6 billion.

Share price recap

Woodside shares have gained almost 37% in the past year, while Santos shares are around 5% higher. Meanwhile, Whitehaven shares have soared 141% while the New Hope share price has rocketed almost 100%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has shed almost 10% in the past year.

Motley Fool contributor Monica O'Shea 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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