Why are ASX 200 energy shares leaping higher today?

Four people on the beach leap high into the air.Four people on the beach leap high into the air.

ASX 200 energy shares are jumping today on the back of higher oil and natural gas prices.

The S&P/ASX 200 Energy Index (ASX: XEJ) is climbing 1.6% at the time of writing. In contrast, the  S&P/ASX 200 Index (ASX: XJO) is up 0.66%.

Let’s take a look at what is boosting ASX 200 energy shares today.

ASX 200 energy shares rise

On a good day for ASX 200 energy shares, the Woodside Petroleum Limited (ASX: WPL) share price is up 1.64%, while Santos Ltd (ASX: STO) is rising 1.3%. Meanwhile, Beach Energy Ltd (ASX: BPT) shares are up 2.85% and the AGL Energy Limited (ASX: AGL) share price is climbing 1.94%.

Oil prices surged by 5% after the European Union put forward a plan to ban Russian crude oil imports within six months. The proposal was outlined in a speech to parliament by European commission president Ursula von der Leyen, the Wall Street Journal reported. The EU is also looking at other financial sanctions.

Von der Leyen said: “With all these steps, we are depriving the Russian economy from its ability to diversify and modernise.”

Brent crude oil is currently priced at US$110.26 per barrel, while WTI crude oil is US$107.87 a barrel, Bloomberg data shows.

Meanwhile, natural gas price futures also surged to more than 13-year highs in the US on Wednesday. The natural gas price is currently trading at US$8.425 per million British thermal units (MMBTu), Trading Economics data shows. This is the highest level since July 2008. Higher temperatures in May and an early start to the air-conditioning season are increasing demand for gas in the US, oilprice.com reported.

Among the ASX 200 energy shares, Woodside today announced plans for a carbon re-use project in collaboration with Eastern Metropolitan Regional Council in Perth. This is subject to a final investment decision later this year.

Woodside, Santos, and Beach Energy are oil and gas producers, while AGL energy is involved in gas and electricity markets.

Share price recap

The S&P/ASX 200 Energy Index (ASX: XEJ) has ascended 30% this year to date. For perspective, the benchmark ASX 200 index has fallen 1.2% over the same period.

Woodside shares have outperformed the index this year, surging 44%. Meanwhile, Santos has soared by 29%, Beach Energy has rocketed nearly 35%, and AGL Energy has ascended 37%.

The post Why are ASX 200 energy shares leaping higher 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 Scott Phillips.

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