S&P/ASX 200 Index (ASX: XJO) energy shares have faced some headwinds over the past month amid a sharp decline in the oil price.
International benchmark Brent crude oil prices slid 2.4% overnight to US$87.93 per barrel.
On 27 September, that same barrel was fetching US$96.55, putting the oil price down 9.1% in a month.
You'll often see commodity-linked stocks make even larger price moves than the commodities they produce.
But in the case of the big Aussie energy stocks, the past month's moves have been far more muted. In fact, not all of the top oil and gas shares have lost ground.
How are ASX 200 energy shares faring?
Here's how these three leading ASX 200 energy shares have performed over the month:
- Beach Energy Ltd (ASX: BPT) shares are down 3.4%
- Woodside Energy Group Ltd (ASX: WDS) shares are down 2.7%
- Santos Ltd (ASX: STO) shares are up 1.4%
Santos shares, as you see above, have even managed to post a healthy one-month gain. Investors may still be reacting positively to the company's quarterly update. Both revenue (US$1.4 billion) and production (23.3 million barrels of oil equivalent (mmboe)) were up from the prior quarter.
Investors in ASX 200 energy shares could also be taking a longer-term view on the oil price, with fears remaining that an escalation in Israel's battle with Hamas could engulf the oil-rich Middle East and send energy prices soaring.
Why is the oil price down?
The oil price has retraced from near one-year highs in September amid a rethink on the supply and demand dynamics.
On the demand side, fears of a recession in Europe and continued sluggish growth in China could see the world burn through less oil than markets had priced in.
On the supply side, what unfolds in Israel and Palestine remains an alarming wild card.
And while OPEC+ is holding to its supply cut promises for now, an unexpectedly big lift in United States' stockpiles has pressured the oil price and thrown up headwinds for ASX 200 energy shares.
Last week the US Energy Information Administration (EIA) reported that US stockpiles increased by 1.37 million barrels.
Commenting on the volatility in oil markets that's caused some big daily price moves among ASX 200 energy shares, Dan Ghali, a commodity strategist at TD Securities said (quoted by Bloomberg), "The turbulent price action" continues to "whipsaw algorithmic trend followers".
Ghali cautioned this could lead to further sizeable moves in the oil price as it could see commodity trading advisers hitting the sell button.
