Sydney, Australia – Energy was the only sector to post gains in morning trading on the Australian Securities Exchange (ASX), driven by a sharp overnight increase in oil prices. The surge came after remarks from U.S. President Joe Biden spurred concerns about possible Israeli strikes on Iran’s oil infrastructure, a potential response to recent missile attacks.
Market Movement
By 1:10 a.m. AEST, the energy sector had risen by 1.51%, standing out against a broader market decline of 1.02%. Leading the charge were oil companies Karoon Energy, up 2.5%, Beach Energy with a 2.2% rise, Ampol gaining 2%, and Woodside Energy increasing by 1.8%. Santos also contributed to the sector’s strength, adding 1% to its share price.
Global oil benchmarks continued their upward trajectory, with Brent crude increasing 0.21% to US$77.78 (AU$113.54) per barrel, and U.S. West Texas Intermediate rising 0.2% to US$73.86. Both benchmarks are expected to close the week with gains of around 8%.
Supply Concerns Tempered
While fears of potential supply disruptions in the Middle East have prompted the market’s reaction, concerns have been somewhat alleviated by the availability of spare production capacity within the Organization of the Petroleum Exporting Countries (OPEC). Despite the unrest, global crude supplies have not yet been directly affected.
This balance between heightened geopolitical risk and existing spare capacity has allowed the energy sector to perform strongly amid broader market weakness.
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