S&P/ASX 200 Index (ASX: XJO) oil and gas stocks were among the biggest beneficiaries of soaring energy prices in the first half of 2022.
Following Russia's invasion of Ukraine, crude oil prices rocketed. By 10 June, West Texas International (WTI) crude had topped US$120 per barrel, up from US$75 per barrel at the beginning of the year.
As you'd expect, that offered some strong tailwinds for ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS).
By 10 June 2022, Woodside shares had gained 59% over the calendar year. Santos shares were up 35% over that same period.
But with a warmer-than-average European winter and China remaining stuck in COVID lockdowns, the second half of 2022 saw reduced demand and oil and gas prices retraced.
WTI traded as low as US$71 per barrel on 9 December.
And both the Santos and Woodside share price fell right alongside crude prices.
What's happening with the oil price in 2023?
That's what happened with the crude oil price and these ASX 200 energy shares in 2022.
So far in 2023, WTI hit a low of US$72.84 per barrel on 4 January. At the time of writing, that same barrel is worth US$79.85.
That's helped boost the Santos share price by 4.3% since the opening bell on 5 January, while the Woodside share price has gained 7.8%.
The question now is, what can investors expect from the oil price for the rest of 2023?
The answer will largely come down to global demand. Which brings us back to China and its long overdue reopening from the COVID lockdowns.
RBC Capital Markets LLC analyst Michael Tran believes that investors haven't properly priced in that reopening yet. RBC forecasts an average price for WTI of US$92 per barrel in 2023 and may already have hit its lows for the year.
According to Tran (quoted by Bloomberg):
China's reopening is hardly being priced into the oil market, yet. We would not be the least bit surprised if the lows of the year end up being the $72-a-barrel print that we saw three weeks ago, on the second trading day of the year.
Indeed, China's State Council has stressed the importance of consumption to spur China's economy back into high gear.
How have these ASX 200 energy shares been performing?
The Santos share price is up 1% over the past 12 months while rival ASX 200 energy share Woodside has gained 46%.
