Why did Santos and Woodside shares beat the ASX 200 today?

Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) shares outperformed the ASX 200 today.

Santos shares rose 1.97% to $7.76, while Woodside shares climbed 3.15% to $36. For perspective, the S&P/ASX 200 Index (ASX: XJO) leapt 0.5% today.

It was a good day for ASX 200 energy shares as a whole. The S&P/ASX 200 Energy Index (ASX: XEJ) closed 2.37% higher, making it the best-performing sector index on the ASX.

Let’s take a look at what might have boosted these two energy shares today.

Oil and gas prices rise

Santos and Woodside are major producers of both gas and oil, and the prices of both these commodities rose today.

The brent crude oil price climbed 0.34% to US$96.02 a barrel, while WTI crude oil lifted 0.27% to US$88.15 a barrel, according to Bloomberg. This follows brent crude oil lifting 2.6% overnight and WTI crude oil jumping 3.25%.

Oil prices rose amid record US crude oil exports of 5.1 million barrels a day, Reuters reported. Crude stocks also lifted by 2.6 million barrels last week.

Nissan Securities general manager Hiroyuki Kikukawa, in quotes cited by Reuters, said:

Solid U.S. crude exports raised optimism over demand and prompted fresh buys, but concerns that China’s muddled economic policies may continue under President Xi Jinping’s growing power limited gains in Asia.

Meanwhile, the European natural gas price lifted 4.54% to €104.32 per megawatt hour, Trading Economics data shows.

Benchmark futures lifted amid news that European measures to deal with energy prices were pushed back to 24 November, Bloomberg reported. This could be well into the European heating season, when demand is expected to be high.

In a quarterly report last week, Woodside highlighted it has signed long-term marketing agreements to provide LNG to the European market. CEO Meg O’Neill said:

Woodside entered into a long-term sale and purchase agreement (SPA) with Uniper Global Commodities to supply LNG from our global portfolio from 2023 into Europe, where buyers are urgently seeking alternatives to Russian gas.

Share price snapshot

Woodside shares have soared 64% in the year to date, while the Santos share price has jumped 23%.

For perspective, the ASX 200 has descended around 8% year to date, while the ASX 200 Energy Index has soared 43%.

Woodside has a market capitalisation of more than $68 billion, and Santos has a market cap of nearly $26 billion.

The post Why did Santos and Woodside shares beat the ASX 200 today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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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