ASX 200 energy shares are enjoying another strong day today.
In afternoon trading, the S&P/ASX 200 Index (ASX: XJO) is down 0.11%, having recovered from some steeper earlier losses.
The S&P/ASX 200 Energy Index (ASX: XEJ), on the other hand, has been trading solidly in the green, currently up 2.13% for the day.
Leading ASX 200 energy share Santos Ltd (ASX: STO) is up 1.64%, while shares in competitor Woodside Energy Group Ltd (ASX: WDS) are up 2.58%.
Image source: Getty Images
What's driving investor interest in these ASX 200 energy shares?
Woodside and Santos both look to be benefiting from a boost in oil prices.
The Brent crude oil price is up 1.8% over the past day to US$93.60 a barrel. Brent hit six-month lows of US$84.06 on 26 September amid fears of a global slowdown impacting demand.
But it seems the rebounding oil price has little to do with resurgent demand. Rather it comes following the latest output decision from the Organization of Petroleum Exporting Countries and its allies (OPEC+).
What did OPEC+ decide?
If you own ASX 200 energy shares, you may wish to tip your hat to the OPEC+ members.
Though not everyone is happy with the cartel's decision.
Yesterday (overnight Aussie time), the group agreed to reduce their combined oil production by two million barrels per day, commencing in November. That represents their biggest supply cut in two years.
As Bloomberg reports, Saudi energy minister Prince Abdulaziz Bin Salman said the reduced output levels will remain through the end of 2023, unless there are material changes in the market.
Nigerian minister of state for petroleum resources Timipre Sylva said falling oil prices would destabilise some of the members' economies. He added, "OPEC wants prices around $90."
While that price offers ASX 200 energy shares like Santos and Woodside a healthy profit margin, the United States government was quick to voice its displeasure.
The White House stated:
The president is disappointed by the short-sighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin's invasion of Ukraine.
Brent crude prices topped US$120 per barrel in June this year, sending ASX 200 energy shares like Santos and Woodside sharply higher.
Year to date, the Santos share price is up 22.6% while Woodside shares have soared 58% higher.
