The S&P/ASX 200 Index (ASX: XJO) is enjoying some decent gains at this point in Thursday’s trading day. At the time of writing, the ASX 200 is up a robust 0.56%. But that’s nothing compared to the Origin Energy Ltd (ASX: ORG) share price.
Origin shares are presently up a very pleasing 3.1% at $5.82 a share after closing at $5.62 a share yesterday and opening at $5.79 a share this morning.
So why are Origin shares so handily outperforming the market as it currently stands?
Well, it’s not due to any major news or announcements out of the company itself, so let’s clear that up.
But it’s the huge spike in energy markets that we’ve seen over the past week or so that could be playing a major role here. Raw energy costs have exploded over the past few weeks, largely as a result of the current crisis in Ukraine. Brent crude is now well over US$100 a barrel. That’s a sharp rise from the sub-US$80 a barrel prices that were with us at the start of 2020. In fact, according to Bloomberg, the price of Brent futures are now above US$115 a barrel.
Origin share price rises amid soaring commodities, new hydrogen plans
As my Fool colleague Zach covered yesterday, the Bloomberg Commodity Index (BCOM), which tracks a global basket of commodities, has just seen its largest rise in over a decade. And the main culprits are crude oil, gas and gold. Not to mention ‘battery metals’ like lithium and copper.
Since Origin is an energy retailer, rising energy prices can be thought of as beneficial to the company.
We also saw Origin announce plans for a new hydrogen hub on Monday, which also elicited a positive reaction from investors at the time. Origin is partnering up with Orica Ltd (ASX: ORI) to plan a new hydrogen hub in Newcastle, New South Wales. It is aiming to deliver ‘green hydrogen’ by using electricity sourced from renewable sources in a 55-megawatt electrolyser.
Perhaps the recent news that Origin will be shutting its coal-fired Eraring power plant in NSW earlier than expected (by August 2025) is also giving investors a confidence boost.
Whatever the reasons for Origin’s rise today, it is no doubt making its shareholders very happy.
At the current Origin Energy share price, this ASX 200 energy utility company has a market capitalisation of $10.22 billion, with a dividend yield of 2.45%.
The post All eyes on energy: Origin (ASX:ORG) share price surges 4% appeared first on The Motley Fool Australia.
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More reading
- Why did AGL (ASX:AGL) shares smash Origin in February?
- Why is the Origin (ASX:ORG) share price edging lower today?
- Origin (ASX:ORG) share price lifts amid green hydrogen news
- Origin (ASX:ORG) share price slides 7% but UBS is still bullish. Here’s why
- Australia’s largest coal power plant set for early D-day. What it means for Origin (ASX: ORG) shares
Motley Fool contributor Sebastian Bowen 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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