Guess which sector September’s top performing ASX 200 shares all came from

Oil worker drilling on the oil field

ASX 200 shares in the oil and gas industry topped the leaderboards in September thanks largely to a jump in oil prices.

Brent crude oil briefly rallied above US$80 a barrel for the first time in three years amid expectations that oil demand will return to pre-pandemic levels in 2022.

Analysts at Goldman Sachs were quick to raise their forecast for oil by US$10 to US$90 a barrel.

Oil has enjoyed favourable supply side-dynamics, notably Hurricane Ida that impacted the US state of Louisana in August and took a major toll on global output.

From a demand perspective, OPEC’s monthly oil report said:

… 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.

A bumper month for ASX 200 oil and gas players

Beach Energy Ltd (ASX: BPT) was the best performing ASX 200 energy share, rallying 42.38% last month to a 5-month high.

The largest ASX-listed oil and gas player, Woodside Petroleum Limited (ASX: WPL) was also ripe for a rebound, surging 22.52% in September to a 3-month high.

Santos Ltd (ASX: STO) shares added 18.7% last month to a 2-month high.

Oil Search Ltd (ASX: OSH) lagged behind slightly, rallying 17.3% to a 7-month high.

What’s next for oil?

Analysts expect a tight oil market to remain in place for the remainder of the year.

According to S&P Global, the Joint Technical Committee of OPEC+ report flags that the market will be undersupplied by 1.2 million barrels a day in October and 900,000 barrels a day in November.

Supply constraints against the backdrop of growing demand may continue to pave tailwinds for ASX 200 oil and gas players.

OPEC+ will hold another meeting on Monday, 4 October which may serve as a major catalyst for oil prices.

In response to the tight oil market, it’s possible that OPEC will opt to raise quotas and drive additional supply into the market.

The post Guess which sector September’s top performing ASX 200 shares all came from appeared first on The Motley Fool Australia.

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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.

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