ASX drops 1.5%, energy stocks soar

Energy stocks held up to the weakness in the Australian stock market on Tuesday, as oil and gas producers continue to benefit from a recovery in oil prices caused by supply shortages.

The benchmark S & P / ASX 200 lost ground throughout Tuesday, with trading falling in the afternoon causing it to close 1.47% lower at 7,275 points.

The weakness was widespread, with falls in mining companies, banks, healthcare and retail stocks, but energy stocks gave investors scant good news.

As the price of Brent oil hit US $ 80 a barrel, the highest level since October 2018, Woodside jumped 5% to $ 25.03, Oil Search rose 7% to $ 4.40, Origin Energy rose and Santos rose 5.6% to $ 7.12.

Beach Energy, which on Monday announced it had signed an agreement to sell liquefied natural gas to BP, jumped 10.5% to $ 1.36.

Adam Dawes, senior investment advisor at Shaw and Partners, said the energy sector was one of the worst performers in the market last year, but the sector’s stock prices are now benefiting from rising prices. oil and strong investor demand.

“The energy sector is the only bright spark,” said Dawes. “The price of oil has started to climb a bit, and that has helped people get behind the oil space.”

Outside of the energy sector, figures from the Bureau of Statistics showed that lockdowns hit the economy hard in August, with retail sales falling 1.7% in the month, due to weakness from New South Wales, Victoria and ACT.

The decline in consumer stocks included a 2% drop in Wesfarmers shares while Woolworths shares lost 1.8%.

Stock prices in the energy sector have surged in recent days amid rising oil and gas prices, amid fears that supply may not be enough to meet growing global demand.

Europe is grappling with soaring gas prices as winter approaches, while in the UK there have been severe gasoline and diesel shortages, forcing some gas stations to to close.

After Tuesday’s stock market crash, most of the broad market gains made over the past week have been almost wiped out.

About Cassondra Durden

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