Why did the Santos share price sink 6% today?

man bending over to look at red arrow crashing down through the groundman bending over to look at red arrow crashing down through the ground

The Santos Ltd (ASX: STO) share price fell on Monday despite the company not releasing any announcements on the ASX.

At market close, the energy producer’s shares finished 6.03% lower to $7.32 apiece.

This means Santos shares have now lost more than 14% since this time last week.

Let’s take a look at what could be impacting the energy producer’s shares.

Why are Santos shares cooling off?

Investors are offloading the Santos share price following a broader fall across the S&P/ASX 200 Energy (ASX: XEJ) index today.

Comprising 11 companies that operate in the oil, gas and coal sector, the index backtracked 5.34% to 9,574.6 points.

Interestingly, the benchmark energy index is down a mammoth 13% in the past week.

This comes after the Federal Reserve’s decision to hand down a 0.75% interest rate hike that spooked financial markets.

A more aggressive monetary tightening policy to combat high inflation levels sparked worry about an impending recession in 2023.

Furthermore, the West Texas Intermediate (WTI) has dipped 10% from 8 June to currently US$110 per barrel.

With oil prices backtracking, this will likely put a squeeze on Santos’ margins along with its peers.

Shares in fellow rival, Woodside Energy Group Ltd (ASX: WDS) also closed the day 4.86% lower.

Santos share price snapshot

It’s been a rollercoaster 12 months for the Santos share price, registering nil gains for the period.

It’s worth noting that the company’s shares reached a 52-week low of $8.86 on 8 June before tumbling 17% to today’s price.

In terms of market capitalisation, Santos is the second biggest energy company on the ASX with a valuation of approximately $26.24 billion.

The post Why did the Santos share price sink 6% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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