The AGL Energy Limited (ASX: AGL) share price is avoiding the market selloff today and pushing higher.
At the time of writing, the energy company’s shares are up over 1% to $9.56.
Why is the AGL share price pushing higher?
Investors have been buying AGL shares this morning for a couple of reasons.
One is the market selloff, which has led to an increase in demand for safe haven assets.
For example, the shares of fellow utility companies APA Group (ASX: APA) and Mercury NZ Ltd (ASX: MCY) are also rising during morning trade.
What else is supporting AGL’s shares?
Also giving the AGL share price a boost today has been the release of an announcement relating to the Portland Smelter in Victoria.
According to the release, AGL has finalised a new agreement to supply a proportion of the electricity requirement of the Portland Smelter aluminium smelter until July 2026. The agreement will take effect from 1 August 2021 when the existing supply contract ends.
AGL advised that the new contract represents a mutually beneficial outcome on commercial terms, for a volume of 275 MW. It also provides the company with some flexibility, including rights in relation to the short-term reduction of volume at times of peak demand.
AGL Managing Director & Chief Executive Officer, Brett Redman, said: “AGL recognises the importance of the Portland smelter to the communities it supports and as a large wholesale electricity user. The total Portland load comprises approximately 10 percent of Victoria’s total energy demand and we are pleased to play our part in securing its continued operations.”
Shareholders will no doubt be hoping this is the start of better times for the AGL share price. After all, year to date the company’s shares are down a disappointing 21%.
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Motley Fool contributor James Mickleboro 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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