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S & P / ASX 200 Index (ASX: XJO) Energy stocks fell on Thursday as oil prices fell sharply overnight.
Western Texas Intermediate fell US $ 2.8 or 3.5% overnight, from intraday highs of US $ 79.76 to US $ 76.91 per barrel. The global benchmark Brent crude briefly hit 3-year highs at US $ 83.45 a barrel before closing the session down 3.15% at US $ 80.82.
ASX 200 energy stocks and oil prices retreat
The S & P / ASX Energy The index (INDEXASX: XEJ) was down 1.02% on Thursday, despite all other sectors being in positive territory.
The Woodside Petroleum Limited (ASX: WPL) The stock price is down 0.36% to $ 24.94.
The Oil Search Ltd (ASX: OSH) the stock price is down 1.32% to $ 4.49.
Santos SA (ASX: STO) is the biggest loser today, down 1.75% to $ 7.30.
While Beach Energy Ltd (ASX: BPT) is also down 1.61% to $ 1.40.
Despite a slight pullback today, the ASX energy index is up 2.06% in the last five days and 16.7% in the last month.
What’s the next step for oil?
Market participants are optimistic about the near-term outlook for oil amid rising demand and tight supply, according to S&P Global.
Oil prices surged this week after the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, reaffirmed its existing plan to increase production by 400,000 barrels per day every month until at least in April 2022.
Market participants expected an increase given tight supply conditions and a lingering energy crisis in Europe and China.
Another tailwind for oil has been hinted at by analysts at Australia and New Zealand Banking Group Ltd (ASX: ANZ). Its report indicates that the recent rise in LNG and coal prices may encourage the industrial and power generation sectors to turn to oil instead.
S&P Global said the market will review the US Energy Information Administration (EIA) report due Oct. 6 for “other pricing clues.”