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.

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


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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

See opportunity on a stock?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Trade a wide range of popular global stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform, when it matters

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Sell
Buy
-
-
China 300
-
-

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

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets 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 spread betting and CFDs.

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

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.