Why AGL (ASX:AGL), Origin (ASX:ORG) shares tumbled today?

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plantA male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plantA male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant

Key points

  • AGL, Origin Energy shares closed lower today
  • Beach Energy, Woodside Petroleum, and Santos also finished in the red
  • Natural gas prices have fallen 19% since 12 January

ASX energy shares, including AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG), have had a tough day on the market.

The AGL share price fell 2.74% to $7.10. Meanwhile, the Origin Energy share price closed 1.58% lower at $5.60. For perspective, the S&P/ASX 200 Index (ASX: XJO) ended the day down 0.51%.

Let’s take a look at what may be impacting energy shares.

Tough day for ASX energy shares

AGL and Origin finished in the red today, but they were not alone. The broader S&P/ASX 200 Energy (ASX: XEJ) also closed 0.53% lower.

Investors could be reacting to the declining price of natural gas. The commodity has fallen 1.68% in the past day to $US3.932 per MMBtu.

Since 12 January, the natural gas price has plummeted by a whopping 19% from US$4.8570 to US$3.932 per MMBtu.

Despite the fall in price, AGL and Origin are reportedly planning to pass increased natural gas costs to consumers, the Herald Sun newspaper reported yesterday.

Origin executive general manager Jon Briskin told the publication:

The increase in natural gas prices for variable rate plans is primarily due to a significant increase in what it costs us to purchase and supply this gas to our customers.

Increasing prices is not a decision we take lightly, which is why we absorbed some increases in network costs in Victoria over the past few years to keep gas prices flat for our customers throughout 2019 and 2020

Meanwhile, in other energy stocks today, the Beach Energy Limited (ASX: BTP) share price fell 1.05%, Woodside Petroleum Ltd (ASX: WPL) dropped 0.24%, and Santos Limited (ASX: STO) dipped 0.14% today.

As my Motley Fool colleague James reported this morning, oil prices dropped on Friday, with the WTI crude oil price falling 0.5% and Brent crude oil prices dropping 0.55%.

Share price recap

AGL shares have dived around 40% in the past year, while Origin Energy shares have climbed 9.6%.

In comparison, the benchmark ASX 200 index has returned about 5% in the past year.

The post Why AGL (ASX:AGL), Origin (ASX:ORG) shares tumbled today? appeared first on The Motley Fool Australia.

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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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