Santos (ASX:STO) share price rallies 5% on bullish OPEC oil outlook

Oil shares are surging on Tuesday …
The post Santos (ASX:STO) share price rallies 5% on bullish OPEC oil outlook appeared first on The Motley Fool Australia. –

The Santos Ltd (ASX: STO) share price is rallying on Tuesday after Organisation of the Petroleum Exporting Countries (OPEC) said that oil demand will exceed pre-pandemic levels in 2022.

At the time of writing, the Santos share price is up 5.02% to a 1-month high of $6.48.

Santos share price rallies on bullish oil forecast

In its monthly oil report, OPEC trimmed its oil demand for the last quarter of 2021 but sees demand exceeding pre-pandemic levels in 2022.

OPEC was bullish on the outlook for oil, forecasting:

In 2022, oil demand is expected to robustly grow by around 4.2 mb/d, some 0.9 mb/d higher compared to last month’s assessment. Revisions were driven by both the OECD and non-OECD, as the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions. Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding prepandemic levels.

This positive commentary and forecast were underpinned by the Organisation’s positive assessment of the global economy.

Although the global economy continues to be affected by developments related to COVID-19, 1H21 saw a healthy economic recovery. Following the strong quarterly economic growth in 3Q21, growth is forecast to slightly decelerate towards the end of the year. It should be noted that the recovery this year has been widely supported by unprecedented government-led stimulus, and global efforts done to contain COVID-19, particularly in Western economies and China.

However, OPEC put the brakes on near-term demand as a result of the Delta variant.

Oil demand in 3Q21 has proved to be resilient, supported by rising mobility and travelling activities, particularly in the OECD. At the same time, the increased risk of COVID-19 cases primarily fueled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates.

As a result, crude oil prices rallied 2.63% higher overnight to ~US$70.35/barrel.

Santos share price snapshot

The Santos share price is up just 2% year-to-date despite oil prices rallying 45% in 2021.

The post Santos (ASX:STO) share price rallies 5% on bullish OPEC oil outlook appeared first on The Motley Fool Australia.

Should you invest $1,000 in Santos right now?

Before you consider Santos, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Santos wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

ASX 200 energy and materials shares are leading the market on Monday

Santos (ASX:STO) share price jumps amid rising oil prices
5 things to watch on the ASX 200 on Monday

How have ASX energy shares performed during the August 2021 earnings season?

ASX 200 rises, Santos and Oil Search merge

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!