S&P/ASX 200 Index (ASX: XJO) energy shares are shrugging off the wider market sell-off today.
At time of writing on Tuesday, the ASX 200 is down 0.3%.
But the big Aussie energy stocks are headed the other way, helping drive the S&P/ASX 200 Energy Index (ASX: XEJ) up 0.6% at this same time.
Here's how these leading ASX 200 energy shares are faring today:
- Santos Ltd (ASX: STO) shares are up 1.3%
- Beach Energy Ltd (ASX: BPT) shares are up 1.0%
- Woodside Energy Group Ltd (ASX: WDS) shares are up 0.3%
Atop their own company-specific achievements, the oil and gas stocks have been benefiting from a resurgent oil price.
What's happening with the oil price?
Offering some tailwinds to the ASX 200 energy shares today, Brent crude gained another 0.4% overnight to be trading for US$94.80 per barrel.
That's up 14% since 23 August, when Brent crude was trading for US$83.21 per barrel. And the oil price is up a whopping 28% over six months when Brent was fetching US$73.79 per barrel.
That huge spike has helped drive some marked outperformance from the ASX 200 energy shares.
Over the past six months the ASX 200 Energy Index has leapt 21%, more than five times the gains posted by the ASX 200 over this same period.
This has been spurred by resurgent global oil demand, which the IEA forecasts will increase by 2.2 million barrels per day in 2023 to 101.8 million barrels per day.
That booming demand comes amid significant supply cuts from OPEC+.
Saudi Arabia reduced its output by one million barrels per day (bpd) in July. And Russia cut its output by 500,000 bpd in August. Both nations have pledged to extend the production cuts at least through the end of the year.
As you'd expect, this has also seen a dramatic fall in oil inventories. The IEA reported that global observed oil inventories reached a 13-month low in August.
Will ASX 200 energy shares see oil at US$100 per barrel?
The past few months have seen a range of analysts revise their oil price forecasts upwards.
While most don't expect Brent to remain above US$100 for very long, many now believe the global crude benchmark will reach this psychological level. That would represent a potential 5.5% increase from current prices and offer further support for ASX 200 energy shares.
Commenting on the oil price, Amrita Sen, head of research at Energy Aspects, said (courtesy of Bloomberg):
Fundamentals are very, very strong right now. At this point it's a short-term thing. I'm not saying it's going to average above $100, but could it go to $100 for a bit? Absolutely yes.
Bjarne Schieldrop, chief commodities analyst at SEB AB, noted that if the oil price shoots too far above US$100 per barrel, it would likely impact demand resulting in downward pressure on prices.
According to Schieldrop:
We are highly likely to see Dated Brent moving above $100 a barrel. But oil product demand is likely to hurt more if Brent crude rises to $110-$120 a barrel, and such a price level looks excessive.
Longer-term, ASX 200 energy shares won't be able to count on OPEC+ to keep global supplies tight and prices elevated.
Amid soaring prices, oil-producing behemoths outside of OPEC+, including Brazil and the United States, can and likely will increase production. That added supply is likely to see the oil price come back down, in time.
But for now, at least, the ASX 200 energy shares are making hay.
