Beach Energy shares are up 1.56% to $1.63 apiece in early trading on Tuesday. The ASX energy stock has risen by just 3.2% in 2023, thereby lagging the S&P/ASX 200 Energy Index (ASX: XEJ), which is up 6.4%.
Ampol shares are up 0.33% today to $33.58 apiece and up 21% over the calendar year so far.
Let's look into why this top broker is backing these two particular ASX energy shares over the rest.
Why J.P. Morgan favours these 2 ASX energy shares
In a note to clients, J.P. Morgan has upgraded the global energy sector as a whole to overweight, but it prefers energy stocks with exposure to oil over gas.
According to reporting in the Australian Financial Review (AFR), the broker likes oil's "structurally positive characteristics and lower OPEC-mitigated volatility".
The broker says oil demand won't peak until after 2030 due to its forecast of a constrained supply of all fuels from here.
J.P. Morgan said:
The clean energy system is not mature enough for the rest of the decade to capture and distribute the significant increase in generation of 'clean' joules to the end customers, owing to supply chain, infrastructure, and key materials bottlenecks.
The broker thinks the Organization of the Petroleum Exporting Countries (OPEC) will retain its role in keeping energy markets steady:
Without increasing oil and gas capex, we risk energy deficits and acute inflation across the commodities complex.
This may lead to multiple oil-led energy crises in this decade, potentially much more severe than the gas crisis seen in Europe in 2022.
Moreover, it serves to position OPEC firmly at the steering wheel of the global oil market, to take greater share of demand growth, while helping mitigate sharp price moves in either direction.
The broker says ASX energy shares Beach Energy and Ampol are its favourites on the Australian market.
J.P. Morgan says Beach Energy is its "preferred play on [the] structurally tight Eastern Australian gas market".
Further, it says Ampol has "attractive exposure to increasing regional refining margins in Australia".