After the smoke cleared from a decidedly turbulent month, the S&P/ASX 200 Index (ASX: XJO) closed May up 0.8%, with ASX 200 energy stocks like Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) dragging on those returns.
Indeed, Woodside shares fell a sharp 8.6% in the month just past, closing May trading for $30.66 apiece.
Santos shares fared the best among the big ASX 200 oil and gas stocks, sliding 2.4% in May to close on Friday trading for $7.81 each.
Rounding out the list, Beach Energy Ltd (ASX: BPT) shares slumped 8.5% in May to $1.08, while Karoon Energy Ltd (ASX: KAR) shares trailed the pack, sinking 10.5% over the month to close on Friday trading for $1.96 apiece.
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Why did ASX 200 energy stocks tumble in May?
The common headwind battering all of the ASX 200 energy stocks in May was the big retrace in global energy prices.
As you're likely aware, oil and gas prices went through the roof in the weeks following the outbreak of the Iran war at the end of February. Indeed, Brent crude oil rocketed from US$72 per barrel on 27 February and was still trading for US$114 per barrel on 30 April.
That big lift saw investors piling into the likes of Woodside shares – which I should note remain up more than 29% year to date despite the May decline. And that's not including the 83.5 cents per share final fully franked dividend Woodside paid eligible stockholders on 27 March.
But with the United States and Iran actively engaged in peace negotiations in May, Brent crude oil fell almost 20% over the month to US$92 per barrel, according to data from Bloomberg. And investors reacted by trimming their positions in the big ASX 200 energy stocks.
Why did Santos shares outperform in May?
Santos shares – also still up 26.8% year to date without including the final dividend payout – lost significantly less than the other ASX 200 energy stocks over the month just past.
This outperformance over Beach, Karoon and Woodside shares may have been driven by a few positive updates from the company.
On 18 May, for example, Santos shares closed up 2.7% after the company announced the first oil production from its Pikka phase 1 projected, located in the US state of Alaska.
With first oil flowing, Santos said it was working to increase production to 20,000 barrels per day (bpd) over the following weeks.
"Alaska has a huge runway ahead of it which will underpin value-accretive production growth for Santos for the long term," Santos CEO Kevin Gallagher said.
"The Pikka phase 1 project has demonstrated Santos' capability to develop this world-class resource safely, responsibly and efficiently.," he added.
