The Santos Ltd (ASX: STO) share price is off to a strong start on Thursday morning.
At the time of writing, shares have jumped from the opening bell and now trade more than 2% higher at $7.86.
Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) has pushed more than 3% into the green, making it the best performing sector on last check.
What's up with the Santos share price?
Helping lock in early gains for hydrocarbons player is price action in the oil and natural gas markets overnight.
Brent Crude oil currently trades at US$94.50, whilst EU gas contracts have spiked another 10% overnight to now rest back in line with March 2022 ranges.
"[We] think we're going to stay in a range – [we] don't think US$70 per barrel is in the cards, but anything over US$100 is not justified," said RJO Futures in a recent note to clients.
Adding more fuel (or oil) to the fire, are remarks from the International Energy Agency (IEA) stating it expects a high amount of gas-to-oil switching for heating purposes coming into a European winter.
Meanwhile, a small but sharp pullback in the US Dollar has also reportedly provided a non-market tailwind for the oil price, Reuters reports.
The culmination of events has been a net positive for the Santos share price today, with investors rallying the stock on a volume of 4.2 million shares in the first hour of trading.
Gains in today's session extend on yesterday's resiliency for Santos on the chart, with the entire Energy sector catching a bid due to weaker US inflation data on Wednesday.
The US core CPI was driven in large by price increases in electricity and natural gas secondary to the many macro-variables at play.
Despite this, thinking is that the lofty inflation print will result in a number of further interest rate hikes from the US Federal Reserve and the Reserve Bank of Australia (RBA) down the line.
With that, energy stocks continue to look increasingly attractive at current valuations.
In the last 12 months, the Santos share price has gained 26.5%.
