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Can these red hot ASX energy shares keep charging higher?

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Oil industry worker climbing up metal construction and smiling.

While much of the broader market has suffered from recent global conflict in the Middle East, ASX energy shares have charged higher.

The S&P/ASX 200 Energy Index (ASX: XEJ) rose 1.2% yesterday while many other sectors fell. 

This index is now up 33% year to date, while the S&P/ASX 200 Index (ASX: XJO) is down just over 4%. 

Some ASX energy shares that have enjoyed strong returns lately include: 

  • Yancoal Australia Ltd (ASX: YAL) is up 72% year to date
  • Karoon Energy Ltd (ASX: KAR) is up 32%
  • Ampol Ltd (ASX: ALD) has risen 15% in March 
  • NexGen Energy Ltd (ASX: NXG) is up nearly 9% year to date. 

Why are energy shares rising?

ASX energy shares are rising mainly because oil and gas prices have surged, driven by geopolitical tensions (especially in the Middle East) and supply disruptions, which tighten global energy supply.

Higher energy prices also increase inflation expectations, making energy stocks more attractive compared to other sectors like tech.

At the same time, investors are rotating into commodities and defensive sectors, pushing more money into energy shares.

Investors may be concerned about whether this rally can continue. Here are some recent outlooks for these high performing ASX energy shares. 

Yancoal Australia Ltd (ASX: YAL)

Yancoal Australia is sitting at a 52-week high at the time of writing, after it climbed nearly 4% yesterday. 

Yancoal has a diversified mix of metallurgical and thermal coal mines, with primary geographical markets Japan, Singapore, China, South Korea, Taiwan, and Thailand. 

It closed yesterday trading at $8.63. 

After hitting record highs, analysts now view the stock as overvalued. 

According to five analysts offering forecasts via TradingView, Yancoal has an average one year price target of $7.66. 

This target is 11% lower than yesterday’s closing price. 

Ampol Ltd (ASX: ALD)

Ampol shares rose another 1% during yesterday’s trade. 

It is the largest, and only Australian-listed, petroleum refiner and distributor. 

After rising 15% in March, analysts now see the stock as fully valued. 

10 analysts have an average one year price target of $33.68 according to TradingView, right around yesterday’s closing price of $33.44. 

Karoon Energy Ltd (ASX: KAR)

Karoon Energy is another energy stock hovering close to its 52-week high. 

It rose a healthy 4.5% yesterday to close trading at $2.06. 

The company is an oil and gas explorer and producer with assets in Brazil.

It is also now fully valued based on targets from analysts. 

9 analyst ratings via TradingView have a one year forecast of $2.04, suggesting there is little future upside. 

NexGen Energy Ltd (ASX: NXG)

NexGen Energy an exploration and development stage entity engaged in the acquisition, exploration, evaluation, and development of uranium properties in Canada.

This ASX energy stock has almost doubled in the last year. 

However unlike the previous three stocks, it appears experts believe this company can continue to rise in 2026. 

UBS recently put a 12 month share price target of $21. 

From yesterday’s closing price of $15.51, that’s suggests almost 35% upside. 

19 analysts’ forecasts via TradingView paint a similar picture, with an average price target of $21.18. 

The post Can these red hot ASX energy shares keep charging higher? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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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