S&P/ASX 200 Index (ASX: XJO) energy shares shot the lights out through most of 2022 as energy prices went through the roof.
Here's how the top Aussie oil and gas stocks performed in 2022 through to market close on 11 November:
- Santos Ltd (ASX: STO) shares gained 19%
- Beach Energy Ltd (ASX: BPT) shares gained 40%
- Woodside Energy Group Ltd (ASX: WDS) shares soared 76%
On 11 November the Brent crude oil price stood at US$99 per barrel.
Since then, oil and gas prices have tumbled lower, with that same barrel of Brent crude selling for US$79 today.
As you'd expect, that's put some selling pressure on these ASX 200 energy shares.
Since 11 November's closing bell, Santos shares are down 8%, Beach Energy shares have dropped 13%, and the Woodside share price is down 12%.
Below you can see how the three ASX 200 energy shares have tracked over the past 12 months.
Yet with Brent crude oil prices down 38% since peaking at US$122 per barrel in early March last year, there could be more pain to come for the big oil and gas stocks in 2023.
Warm weather and COVID stymie ASX 200 energy shares
On the gas front, ASX 200 energy shares won't receive a leg up from a warm snap in Europe and windy weather to drive turbines. The combination has slashed demand for gas-powered electric generation.
This has driven gas prices in the war-weary continent down to levels not seen since November 2021, before Russia's invasion of Ukraine.
According to data from Bloomberg, benchmark futures for gas slid 11% overnight.
As mentioned up top, oil prices have also been retracing.
Much of that looks to be spurred by investors reanalysing the near-term demand out of China.
Until recently, China's reopening from its multi-year zero COVID policies had been expected to see an uptick an oil demand, which would have been welcomed by the ASX 200 energy shares.
However, all has not gone as planned. The Middle Kingdom is struggling with surging infections, delaying any big lift in energy demand brought on by the grand reopening.
According to Rebecca Babin, a senior energy trader at CIBC Private Wealth Management (quoted by Bloomberg):
The disconnect between how forward-looking assets like energy equities anticipated a China recovery does not translate to immediate crude strength as there is a lot of near-term risk to demand before we see recovery take hold.
That's not to say ASX 200 energy shares might not regain their momentum down the road.
In fact, the energy market could turn around in a matter of weeks, according to Amrita Sen, chief oil analyst at consultant Energy Aspects.
"There's a few more weeks of softness I would think," she said.
