After plummeting during the early months of the pandemic, ASX 200 energy shares came roaring back. What’s next for the sector?
The post How pent-up demand could turbocharge ASX 200 energy shares appeared first on The Motley Fool Australia. –
Battered by international and domestic travel restrictions, which sent crude oil prices plummeting into the basement in March and April last year, energy shares joined travel shares for the ignominious honour of posting some of the steepest falls on the ASX 200.
You may recall that less than a year ago, on 27 April 2020, a barrel of Brent crude oil was worth US$19.99.
Today that same barrel is selling for US$66.54. An increase of 232%.
The bullish outlook for crude oil prices
While COVID-19 remains a wild card in the outlook for crude oil demand and prices, a growing number of analysts, including JP Morgan, are bullish on the short-term outlook for oil.
Edward Moya, senior market analyst at Oanda Corp shares that outlook. Moya said (quoted by Bloomberg), “There’s going to be tremendous pent-up demand for crude. There are some areas that are seeing cases trend higher, but the restrictions are going to be short-lived as vaccines get distributed.”
Bill O’Grady is the executive vice president at Confluence Investment Management in St. Louis. Commenting on his outlook for the crude market, O’Grady said, “There’s always bearish factors in any market, but now that we’ve broke out to the upside, it likely means we’re going to retest the old highs, if not go through them.”
Two leading ASX 200 energy shares
At the current price of $7.18 per share, Santos has a market cap of $14.9 billion. The company trades on a price to earnings (P/E) ratio of 12.8 times. Up 2% in late afternoon trading today, the Santos share price is up 69% over the past 12 months. That compares to a gain of 30% on the ASX 200.
Woodside, up just under 1% today, is trading for $24.36 per share, giving it a market cap of $23.5 billion. Woodside shares have gained 16% over the past 12 months and 6% year-to-date.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
- What’s going on with the Rio Tinto (ASX:RIO) share price today?
- ASX 200 flat: Zip raises $400m, Bank of Queensland results, Regis crashes
- Why the Whitehaven Coal (ASX:WHC) share price is plunging 14%
- The Pendal (ASX:PDL) share price lifts on funds update
- What’s happening with the Boral (ASX:BLD) share price?
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post How pent-up demand could turbocharge ASX 200 energy shares appeared first on The Motley Fool Australia.