Energy stocks surge on speculation that the oil price war may soon end

'Buy the rumour, sell the news,’ so the saying goes.

Oil prices rebound

Oil markets climbed overnight off the back of news that Saudi Arabia and Russia’s oil price war may soon come to a close.

Centrally, as CNBC yesterday reported:

‘Oil prices skyrocketed on Thursday after President Donald Trump told CNBC Saudis and Russia will ease pressure on oil, ending a price war that has contributed to crude’s massive plunge.’

US President Donald Trump – elaborating on how such events may play out in practical terms – yesterday tweeted:

‘Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels.’

In typical Trump fashion, he even noted that these production cuts could run as deep as 15 million barrels.

In response to this speculation, oil markets rose aggressively: yesterday West Texas Intermediate futures (WTI) peaked at a little over US$25 per barrel; while Brent Crude futures traded closed to US$30 per barrel at its intraday high, according to Bloomberg Data.

Of course, it should be noted that neither Saudi Arabia nor Russia have yet to come to any sort of production cut agreement; though they have agreed to hold an emergency OPEC+ meeting.

The specific timing around this OPEC+'s emergency meeting remain uncertain.

Santos, Oil Search and Woodside share prices rise

In a classic case of ‘buying the rumour’ – ASX-listed gas and oil stocks traded bullishly at the open today, with Oil Search up as much as 21% at one point.

However, these key ASX energy stocks gave up some of these gains by the afternoon: at the time of writing, the Santos share price stood at $4.23 per share; Woodside Petroleum traded at $20.02 per share; and Oil Search – trading at $2.82 per share (up a still impressive 8%) remained the second best performing ASX 200 equity, as of 13:54 AEDT.

Mind you, as we wrote on Monday and citing ING research:

‘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”.’

Adding to this, oil markets have pulled back in the last 24-hours: WTI futures last traded at US$24.36 per barrel (-3.79%); while Brent Crude futures traded some 2.17% lower, to $29.29 per barrel, according to Bloomberg Data.

How to trade energy stocks

What do you make of these new developments: are you bullish or bearish on oil? Whichever way you lean, you can use IG’s world-class trading platform to trade some of the key ASX-listed energy stocks we have discussed today – both long and short.

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

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘WPL’ or ‘Woodside Petroleum' 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.

Please see important Research Disclaimer.

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

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

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

liveprices.javascriptrequired

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 Monday 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…

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.