Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Australian energy stocks fall, as oil futures collapse

As oil market volatility intensifies, we examine the price action from some of Australia’s most important gas and oil companies.

ASX energy stocks Source: Bloomberg

Energy shares dive as oil market volatility spikes

For those watching oil futures markets over the last few days, it should come as little surprise that some of Australia’s largest gas and oil companies faced significant selling pressure when the markets re-opened today.

This looks to have been compounded by broad market weakness, with the share prices of Santos, Woodside Petroleum, Origin Energy, Caltex and Oil Search all finishing out the session lower.

Caltex was the worst performing here, as news broke that acquisition discussions with multinational Alimentation Couche-Tard (ATD) had ended. With a twinge of hope, the company’s management said that:

'ATD has communicated an intention to seek to re-engage once there is sufficient clarity as to the global outlook, although there is no certainty that ATD will ultimately do so.'

Nonetheless, the Caltex share price finished out the session down $1.84, or 7.81%, at $21.72 per share.

Elsewhere, Santos dove 3.73%, Origin Energy crashed 5.42%, Woodside dropped 4.41% and Oil Search fell 2.92%; while the ASX 200 Energy index (AXEJ) finished out the session 312 points, or 4.61% lower at 6,469.50.

Oil futures plunge, OPEC+ deal not enough

This equity market volatility comes as WTI futures plummeted on Monday, with the WTI May Nymex contract hitting an intraday low of US$14.47 a barrel – at around 9PM EDT. This sharp move represents a staggering 20% decline from the close on Friday, where the May contract finished out the session at US$18.27 a barrel.

Though the WTI May futures contract has yet to rollover, the WTI June Nymex futures contract is now disproportionally the more actively traded contract. According to CME Group, the WTI June futures contract volume last stood at ~210k – representing about 5x more volume than the WTI May futures contract.

Ultimately, all of this volatility comes as many doubt the effectiveness of OPEC+’s recently announced production cut agreement.

Though this cut may have signalled the end to Russia and Saudi Arabia’s bitter oil price war, according to Stephen Innes, Chief Global Market Strategist at Axicorp:

‘It hasn't taken long for the market to recognise that the Opec+ deal will not, in its present form, be enough to balance oil markets.’

Such a point is one we made note of in early April, citing ING research, where we wrote:

‘Even if Russian and Saudi Arabia can come to a production cut agreement, ING notes that it would “still likely not be enough to bring the market back to balance”.’

As oil market volatility persists, balance indeed looks to elude the markets.

How to trade energy stocks

What do you make of these recent developments: do they represent bullish or bearish opportunities? Whatever your opinion, you can use CFDs to trade ASX-listed energy stocks – LONG or SHORT through IG’s world-class trading platform now.

For example, to buy (long) or sell (short) Caltex using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter 'CTX’ or 'Caltex’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.