Short sellers have been clamouring onboard Lake Resources N.L. (ASX: LKE) in 2022, likely on the assumption its share price will soon fall.

The stock’s short position has increased from around 0.1% at the start of the year to sit at 10% at last count.

The Lake Resources share price has fallen 16% over the same period to trade at 91 cents today.

For context, the S&P/ASX 200 Index (ASX: XJO) has also dumped 15% year to date.

So, could short sellers be right about the future of the Lake Resources share price? Let’s take a look.

Short sellers sceptical of Lake Resources share price

The Lake Resources share price has faced increasing pessimism over recent months, with short interest in the stock increasing around 10,000% year to date.

And such cynicism likely wasn’t helped by a scathing attack from activist short seller J Capital in July.

J Capital authored a report which stated, among many critiques, that the direct lithium extraction technology intended to be used at the company’s Kachi Project wouldn’t work as predicted. It also took aim at the company’s management, saying insiders had been selling millions of dollars of stock.

The company clapped back against such claims, but its response seemingly hasn’t been enough to appease short sellers.

Additionally, the company’s former managing director Steve Promnitz abruptly abandoned the company in June, seemingly selling all his stock in the lithium hopeful. As an aside, Promnitz has today been appointed managing director of lithium and gold developer Qx Resources Ltd (ASX: QRX).

And now, the company is in a dispute with its project partner Lilac Solutions over the details of an earn in agreement.

Of course, all of the above has likely rang alarm bells for Lake Resources investors. And many of the happenings were also a red flag for experts.

TMS Capital’s Ben Clark and Marcus Today’s Henry Jennings dubbed Lake Resources’ shares a sell rating last month, Livewire reports.

Commenting on the bearish outlook, Clark said, courtesy of the publication:

It’s got a mine in Argentina, which will probably need close to a billion dollars spent on it to get it into production. It’s still some years away from production and who knows what the lithium price is by then?

Jennings continued, reportedly saying:

[Promnitz] went off into the sunset, selling his … shares almost instantly. That doesn’t usually happen. Usually, they make some personal reasons.

So for me, there are much better lithium stocks to play, so at the moment, it’s a sell.

The post Are short sellers right about the Lake Resources share price? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Why is the Lake Resources share price sinking 7% on Monday?
• Here’s which ASX lithium shares investors have been loading up on this month
• Why has the Lake Resources share price been so volatile lately?

Motley Fool contributor Brooke Cooper 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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The AGL Energy Limited (ASX: AGL) share price is outperforming the market even as one of Australia’s most influential super funds is putting pressure on the company.

The $68 billion healthcare superfund, HESTA, is warning AGL’s board that its soon-to-be-released decarbonisation plan better be good, as reported by the Australian Financial Review.

The market seems to have cast an early verdict. The AGL share price is up 3.12% to $6.61 while the S&P/ASX 200 Index (ASX: XJO) is 0.88% lower during afternoon trade.

AGL share price coping with the pressure

However, HESTA itself is under pressure from members to explain why it doesn’t sell its entire holdings in AGL. HESTA’s chief executive Debby Blakey is trying to convince them that engagement is better than divestment. She said:

We are seeking to learn more about how they will mitigate climate risk, how they will reduce emissions and how they will manage the situation, support the transition and align with that 1.5 degree transition pathway.

More board changes could be afoot

There have been significant management changes since AGL’s failed plan to split itself into two companies. HESTA voted against the demerger and there could be more changes to the board. This is because HESTA has not decided who to back when directors seek re-election.

But given the turmoil that has already rocked the AGL share price since the Mike Cannon-Brookes-led campaign against AGL’s spilt, investors do not seem too perturbed.

More ASX shares in the climate firing line

If it’s any consolation to AGL’s board, it won’t be the only ASX company that HESTA is pressuring. The fund will write to all S&P/ASX 300 (ASX: XKO) companies in its portfolio asking them to outline plans to tackle climate change, social inequality, and biodiversity.

The letter will warn companies that those who don’t have a fit-for-purpose plan will face a revolt from HESTA. This could include uncomfortable shareholder resolutions, votes against directors, and HESTA dumping their shares.

The fund, which has 950,000 members, has a 2050 net-zero target for its investment portfolio. It also has a 50% carbon reduction interim target set for 2030 (the baseline year is 2020).

HESTA’s move comes at a time when several large cap ASX companies have been accused of greenwashing. That means they are only paying lip service to their climate commitments for PR and marketing purposes.

AGL share price snapshot

The AGL share price is under more scrutiny than most on the climate front due to its ownership of coal-fired power plants.

But the market sees value in the shares given they’ve rallied 16% over the past year. In contrast, the ASX 200 has fallen over 11% in the same period.

On the other hand, longer-term investors are probably underwater on their investment. The AGL share price was trading at more than $20 in early 2020.

The post AGL share price rallies despite sustained pressure from $68 billion super fund appeared first on The Motley Fool Australia.

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• Despite all the recent noise, is it business as usual for AGL shares?
• What’s next for AGL shares following the company’s latest shake-up?
• AGL share price dips following changing of the guard

Motley Fool contributor Brendon Lau 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As one of the most successful stock pickers in history, Warren Buffett regularly inspires investors around the world. Some of those folks may be interested to know that Buffett’s holding company, Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B), has taken a targeted interest in video game powerhouse Activision Blizzard, Inc. (NASDAQ: ATVI) throughout 2022. 

At the end of 2021, Berkshire Hathaway owned roughly 1.8% of Activision Blizzard. Buffett increased his stake in the games company more than once in 2022, with shares growing from 64.3 million to 68.4 million in August — or about 8.7% of Activision. Let’s take a look at why it has captured Buffett’s interest.

A possible deal with Microsoft 

Buffett’s move to increase his investment in Activision Blizzard was prompted by Microsoft Corporation‘s (NASDAQ: MSFT) announcement in January that it would acquire the gaming company for $95 per share in an all-cash transaction valued at $68.7 billion. The deal would be the biggest the gaming industry has ever seen, and thus attracted scrutiny from regulators around the world. Buffett garnered criticism back in April when Berkshire Hathaway first increased its investment in the company, as analysts believed the move was a gamble in the face of pending regulatory decisions.

However, Buffett’s move to load up on Activision stock was a vote of confidence that the deal will be completed. The acquisition requires approval from various countries to ensure it does not lead to Microsoft becoming overly dominant in the video game market. The concern stems from Activision’s franchise Call of Duty, the world’s second-best-selling game series. In 2020 alone, more than 200 million people bought a total of $3 billion worth of products related to the franchise.

Under Microsoft’s control, those games could give it a significantly greater edge in attracting players to its consoles and services over those of its competitors. While Activision Blizzard’s game library would be a lucrative asset for Microsoft, the company is unlikely to become all-controlling in the market. Even with this acquisition, it would be just the third-largest video game company after Tencent and Sony — a fact that bodes well for the deal’s regulatory approval.

On Aug. 22, Saudi Arabia’s regulator became the first authority to give the acquisition its stamp of approval. However, Microsoft most crucially needs sign-offs from the world’s three main regulators: the U.S. Federal Trade Commission (FTC), the United Kingdom’s Competition and Markets Authority (CMA), and the European Commission. Each of them has the power to block the deal or impose conditions. 

What will the acquisition mean?

As the Activision Blizzard acquisition would be an all-cash deal, investors in the gaming company would see their shares disappear from their portfolios, replaced with the cash value if the purchase goes through. Activision Blizzard stock sits at about $75 a share and has fluctuated in the range of $75 to $79 over the past month.

Consequently, prospective buyers stand to profit by a little over 26% at Microsoft’s purchase price of $95 a share. The Berkshire Hathaway stake is currently worth about $5.1 billion, which will become $6.4 billion if the deal goes through.

Even if the acquisition does not occur, Activision Blizzard shares may still make a smart, long-term buy. The share price is still 28% below the height it reached in February 2021, before it began to plummet following negative reports about the company’s treatment of its employees. Additionally, Buffett purchased a stake in Activision Blizzard before the Microsoft deal was announced, an indication that he believes in the outlook for the video game company.

How likely is regulatory approval? 

The CMA revealed on Sept. 15 that it planned to take an even more “in-depth” approach to its regulatory process, moving into phase two of its investigation. The British antitrust authority has expressed concerns that Microsoft’s Activision Blizzard acquisition would be anti-competitive. The CMA’s next step will examine whether the deal means that Microsoft could “withhold or degrade” Activision’s content from competing consoles or services and whether it will “raise barriers to entry and foreclose rivals in cloud gaming services.”

The main concern is that Microsoft will make Call of Duty exclusive to its Xbox consoles. However, Microsoft has already asserted that it has no plans to do so, which should mitigate antitrust concerns. It’s possible that regulators could approve the deal with the stipulation that Activision titles cannot be made exclusive to Xbox consoles — a condition that would not devalue the deal for Microsoft. 

Both parties have expressed optimism that the deal will go through. Activision Blizzard CEO Bobby Kotick said on Sept. 1 that the process is “generally moving along as expected,” and said he expects it to be complete by June 2023. All in all, there seems to be a great deal of positivity surrounding the Activision acquisition, which has only been strengthened by Buffett’s confidence in the stock. Now might be the best time to buy. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Warren Buffett loves this US stock appeared first on The Motley Fool Australia.

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Dani Cook has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Activision Blizzard and Microsoft. The Motley Fool Australia has recommended Activision Blizzard. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Two experts have revealed a couple of ASX shares that could perform strongly if the looming recession hits.

Forager Australian Shares Fund senior analyst Alex Shevelev and founder Steve Johnson gave their picks as part of a podcast posted on Livewire yesterday. The episode focused on how investors could continue to grow their portfolios amid rising interest rates and price increases for essential goods and services.

According to the pair, consumer spending, in general, is anticipated to slow down, with more money being earmarked in people’s budgets for paying down existing debt instead of splurging on discretionary items.

So, let’s not keep you in suspense. Below we uncover the companies and why these experts think they could insulate portfolios in the current climate.

RPMGlobal Holdings Ltd (ASX: RUL)

RPM provides software to clients in the mining industry. Shevelev stated that its revenues are subscription-based and are unlikely to be affected by the predicted headwinds felt by everyday consumers.

Shevelev said:

RPM is another large investment in the portfolio, software for mining companies. And that has performed very well to date in terms of attracting new subscription revenue to the business. And it feels like that business is not going to stop because of all these macro factors. Yes, commodity prices being dramatically lower would be a hindrance, but the current levels or levels marginally below are sufficient to continue growing. There’s a lot more stock specific factors at play here rather than just the overall arching macro themes.

Some of this optimism may be chalked up to RPM expecting record sales growth for FY23 as part of its guidance in its FY22 annual report. If the milestone is reached, it will be the fourth time it has done so over the last four consecutive years.

Readytech Holdings Ltd (ASX: RDY)

Readytech is a software-as-a-service (SaaS) company that provides payroll, human resources, education, and other cloud solutions. Shevelev believes this company will also be shielded from the downside of inflationary pressures and could even benefit from them.

Shevelev said:

[Readytech] will not be facing a consumer who was seeing less money in their pocket. It will be facing an organisation that has reasonably steady revenues, that has a focus on keeping its systems up to date because those systems often help them to save money and be more efficient with their internal processes.

And, in fact, companies like that are now taking advantage and actually increasing their product pricing to their customers because they are seeing some inflationary pressure and they’re actually able to pass that through to their customers.

Readytech outlined plans for further expansion into the justice sector in its financial report for FY22, providing further stability to its earnings through blue-chip government contracts.  

The post Experts reveal 2 ASX shares primed for growth despite a slowing economy appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended RPMGlobal Holdings and Readytech Holdings Ltd. The Motley Fool Australia has recommended RPMGlobal Holdings and Readytech Holdings Ltd. 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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The Whitehaven Coal Ltd (ASX: WHC) share price has been a big performer for shareholders in 2022.

Whitehaven shares have risen by 225% in the year to date. It’s up by another 5% today.

This year the business has benefited from the rising coal prices as countries look to find alternative sources of energy away from Russia.

Whitehaven has been rewarding investors with shareholder returns through a significantly bigger dividend as well as an ongoing share buyback.

Why is the Whitehaven share price powering higher today?

The ASX coal share could also be benefiting from a positive broker note out of Macquarie.

Macquarie has increased its price target by 20% to $12 for the coal miner. That implies the Whitehaven share price could rise by more than 30% over the next year.

So why is the broker more confident in the coal miner’s share price?

According to reporting by The Australian, Macquarie has an improved outlook for thermal coal prices because of the market deficit and the willingness of some wealthy countries to “pay a premium to secure energy supply”.

It has increased its 2022 thermal coal price forecast by 25% to US$410 per tonne and the 2023 price forecast is also up to US$367.50 per tonne.

Macquarie’s estimate for Whitehaven’s earnings per share (EPS) has increased by 28% for FY23 and between 100% to 200% for FY24 to FY27.

Does that mean big dividends could continue?

It certainly seems so, according to Macquarie.

Whitehaven’s final FY22 dividend per share was a fully franked dividend per share of 40 cents. That dividend alone equates to a grossed-up dividend yield of 6.4%.

Macquarie’s dividend estimates put the grossed-up dividend yield of Whitehaven at 16.9% for FY23 and 19.8% for FY24. If those estimates prove accurate, then the next couple of years look very promising for shareholders. However, the coal price and profitability aren’t expected to stay this high forever.

Is the Whitehaven share price good value?

Macquarie thinks so, with its price target of $12 and an outperform rating.

In terms of the price/earnings (p/e) ratio, Macquarie’s numbers put the Whitehaven share price at under three times for FY23 and FY24. Of course, time will tell whether Whitehaven is able to generate the profits that it’s projected to make.

The Russian invasion of Ukraine was an unexpected event and I think it’s worth keeping in mind that it’s possible that something else unexpected could lead to another major change.

The post Up 200% so far this year, is it too late to buy Whitehaven shares now? appeared first on The Motley Fool Australia.

More reading

• ‘Willingness to pay a premium’: ASX coal shares boom again on Wednesday
• September living up to its ‘worst month of the year’ reputation as ASX 200 finally cracks
• Broker names 2 high yield ASX 200 dividend shares to buy
• Here are the top 10 ASX 200 shares today
• Whitehaven share price leaps 8% amid ASX 200 coal rally

Motley Fool contributor Tristan Harrison 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 recommended Macquarie Group Limited. 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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The Core Lithium Ltd (ASX: CXO) share price is deep in the red on Wednesday despite no announcements from the company.

At market open, the lithium producer’s shares were hovering in positive territory before plummeting to an intraday low of $1.065 a share.

Currently, the Core Lithium share price is $1.085, down 8.82%.

Let’s take a look at what could be driving the fall in the company’s share price.

Core Lithium shares retreat

Investors are selling off Core Lithium shares amid a mixed session across the ASX Indices.

With the S&P/ASX 200 Materials Index (ASX: XMJ) edging 0.72% lower at the time of writing, a number of lithium companies are struggling.

Shares in Liontown Resources Ltd (ASX: LTR) and Allkem Ltd (ASX: AKE) are down 3.3% and 2.86%, respectively.

One reason for the Core Lithium share price tanking more than its peers might be that investors are taking profit.

The company’s shares have risen 175% in a year, and are up 85% in 2022.

Since the start of the month, before its abrupt fall on 13 September, Core Lithium shares rocketed by more than 30%.

The company released a business update to shareholders yesterday, noting that first production at its Finniss Lithium Project isn’t far away.

In addition, management advised it is following the footsteps of peer Pilbara Minerals Ltd (ASX: PLS). This will see Core Lithium auction off its first direct ship ore spodumene shipment from Finniss before the end of 2022.

However, shareholders didn’t seem too fazed about the update, sending Core Lithium shares 8.7% lower yesterday.

Core Lithium share price snapshot

Adding to today’s fall, the Core Lithium share price has tumbled more than 24% in a week.

Based on today’s price, Core Lithium commands a market capitalisation of approximately $1.9 billion.

The post Why is the Core Lithium share price sinking 9% today? appeared first on The Motley Fool Australia.

More reading

• September living up to its ‘worst month of the year’ reputation as ASX 200 finally cracks
• Why brokers say these ASX growth shares are buys
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• Why are these ASX lithium miners powering up today?
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Motley Fool contributor Aaron Teboneras has positions in Pilbara Minerals Limited. 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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Today’s broader selling action hasn’t dampened investor enthusiasm for this small-cap ASX mining share.

The All Ordinaries Index (ASX: XAO) has given back its early morning gains and is currently down 0.8%.

But Carnaby Resources Ltd (ASX: CNB) is heading the other direction, up 8.3% to 78 cents per share.

Here’s what’s driving investor interest in the ASX mining share.

What did Carnaby Resources report?

The Carnaby Resources share price is surging after the ASX mining share reported a fresh round of “exceptional drill results” from its Mount Hope Prospect at the Greater Duchess Copper Gold Project, located in Queensland.

Top composite drill results included 30 metres at 3% copper and 0.4 grams of gold per tonne from 60 metres to bottom of hole.

Another highlighted result was 35m at 1.7% Cu, 0.2g/t Au from 60 metres; including 15 metres at 2.9% Cu, 0.3g/t Au.

Commenting on the results sparking interest in the ASX mining share today, Carnaby Resources managing director Rob Watkins said:

We are only at the start of unlocking what lies beneath the ground at Mount Hope and believe that this could rapidly unfold and link up into a very large discovery with numerous IP anomalies and outcropping mineralisation about to be drilled for the first time.

Watkins also pointed to the promising results shown by the miner’s portable X-ray fluorescent (pXRF) testing at one particular hole.

“We are eagerly awaiting the laboratory assay results from MHRC029 in particular, from which the pXRF results indicate an intersection of at least 65m @ 2.1% copper,” he said. Adding that “analysis of past samples has shown actual assay grades can exceed pXRF readings by up to 30%”.

How has this small-cap ASX mining share been performing?

Though Carnaby Resources has lost a fair bit of ground in 2022, the ASX mining share remains up 143% over the past 12 months. That compares to a full-year loss of 12% posted by the All Ordinaries.

The post ‘This could rapidly unfold’: Why this ASX mining share is leaping 8% today appeared first on The Motley Fool Australia.

More reading

• Why is the Core Lithium share price sinking 9% today?
• I can’t wait to retire, but I won’t take these 3 risks to get there
• Why is the Santos share price all over the pitch on Wednesday?
• Could this be pumping ASX 200 energy shares higher on Wednesday?
• Here’s what Citi is saying about the Xero share price

Motley Fool contributor Bernd Struben 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As far as jobs go, mine is pretty great. It’s flexible enough to work around my other commitments, and I get to help others learn important money management skills. But even so, I look forward to that day, decades from now, when I can leave the workforce and devote more of my attention to my hobbies.

I’m OK taking my time to get there because I want to make sure that when I do retire, I can afford to live comfortably. That mindset leaves me unwilling to take the following three risks with my money.

1. Making risky investments

Investing in penny stocks or meme stocks carries a small chance of becoming a multimillionaire quickly, but the odds of losing money are much greater. They’re extremely volatile, and buying and selling at the right times to turn a profit are more a matter of luck than skill. Technically, all investments carry some risk of loss, but when you invest in strong, established companies, there’s a greater chance your portfolio will do well over time. 

I prefer to spread my money between many stocks to reduce my risk of loss. An index fund is a great way to do this. It gives you instant ownership in hundreds of companies in several industries. And it’s usually pretty affordable too. Most index funds only charge you a few cents to a few dollars per year to own them.

2. Keeping all my money in stocks

Stocks are considered riskier than some other investments, like bonds. But they also offer greater growth potential over the long term. Since I’m fairly young, I’m happy to accept this additional risk in the hope it will lead to larger returns down the road. But I also recognize the risk of keeping all my money in stocks, especially as I age.

As your nest egg grows, it’s wise to move some of your money out of stocks and into bonds over time to protect what you have. This can help reduce your risk of significant losses on the eve of retirement. But you don’t want to make this move too quickly or you could hamper your savings’ growth.

A good rule of thumb is to keep 110 minus your age in stocks. So for a 40-year-old, that’d be 70% in stocks and 30% in bonds. And you keep adjusting your asset allocation a little at a time, until you reach 60% in stocks and 40% in bonds at 50 years old.

3. Underestimating my retirement needs

While many expect they’ll need as much as $3 million to retire comfortably, others think they’ll need $250,000 or less. I prefer to err on the side of the former group because I don’t want to make the mistake of underestimating my expenses. If I drain my retirement savings too early, I may have to come out of retirement or give up some of the things I enjoy in order to pay my bills.

One simple strategy you can use to estimate your retirement costs is to save 25 times your annual expenses. This is supposed to help your money last at least 30 years. But your results may vary. You could also try using a retirement calculator and your own estimates of your annual retirement expenses to determine how much you should save.

It’s OK to change your retirement plan over time if your lifestyle or financial situation changes. But don’t let this uncertainty stop you from developing a savings strategy right now. Having a plan can help you stay accountable, and it can bring you some peace of mind as well.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post I can’t wait to retire, but I won’t take these 3 risks to get there appeared first on The Motley Fool Australia.

More reading

• Why is the Santos share price all over the pitch on Wednesday?
• Could this be pumping ASX 200 energy shares higher on Wednesday?
• Here’s what Citi is saying about the Xero share price
• ‘Willingness to pay a premium’: ASX coal shares boom again on Wednesday
• Why is the BHP share price outperforming the ASX 200 today?

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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Santos Ltd (ASX: STO) share price has slipped into the red in early afternoon trade after kicking goals this morning.

Santos shares reached $7.13 apiece in morning trade, up 2.6% on yesterday’s closing price of $6.95. The Santos share price is currently 0.43% lower at $6.92 a share.

The S&P/ASX 200 Index (ASX: XJO) is also down 0.83% after spending most of the morning in the green. It’s on the verge of sinking beneath its June lows, dragged down by material stocks heading lower after early gains amid a downturn in Wall Street futures.

Yet energy stocks are broadly outperforming today, with the S&P/ASX 200 Energy Index (ASX: XEJ) up 0.96% at the time of writing.

What’s boosting the energy sector?

The energy sector is likely getting some tailwinds from an uptick in oil prices. On Monday, Brent crude oil was trading for US$84.06 per barrel. That same barrel is trading for US$85.98 today, up 2.3%.

Meanwhile, gas prices are also on the rise, with Bloomberg reporting that benchmark European gas prices spiked by as much as 12% yesterday.

Gas prices leapt on news of massive damage to the Nord Stream gas pipeline in Europe. The pipeline, operational since 2011, pumps gas directly from Russia to Germany, where much of it is then sent to other parts of the continent.

But it looks like that gas won’t be flowing again for a long time, putting further upward pressure on energy prices. In turn, this may also support the Santos share price in the medium term.

Two explosions were reported in the Baltic Sea in an act that Western officials believe is deliberate sabotage on the part of Vladimir Putin’s regime.

According to James Huckstepp, head of EMEA gas analytics at S&P Global Commodity Insights (courtesy of Bloomberg), “Prices are also trading higher on speculation that this was sabotage, although what that would mean remains highly speculative.”

On the sabotage front, Denmark’s prime minister Mette Frederiksen said, “It’s hard to imagine that these are coincidences. We can’t rule out sabotage.”

Patrick Graichen, deputy to Germany’s economy minister, added:

We have seen that it is part of the Russian war strategy to play actively with the gas market. Just as Nord Stream 1 was shut off under murky circumstances, Putin is good for anything.

While our beat here at The Motley Fool is markets and smart investing, we sincerely hope Russia’s conflict with Ukraine comes to a rapid end.

Santos share price snapshot

The Santos share price is up 11% in 2022. That compares to a year-to-date loss of 14.8% posted by the ASX 200.

The post Why is the Santos share price all over the pitch on Wednesday? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Bernd Struben 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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S&P/ASX 200 Index (ASX: XJO) energy shares are outperforming on Wednesday amid news major pipelines supplying gas to Europe have suffered unexplained leaks.

Some European leaders are said to have accused Russia of orchestrating two explosions on the Nord Stream pipelines amid continuing concerns of an energy shortage on the continent.

European gas prices jumped as much as 20% on Tuesday (Wednesday AEST) amid news of the leak, The Wall Street Journal reports.

Back home, the S&P/ASX 200 Energy Index (ASX: XEJ) is leaping 1.01% at the time of writing. Meanwhile, the ASX 200 has slipped 0.76%.

Here’s how some of the market’s favourite energy stocks are performing right now:

• The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.43% at $31.11
• That of Santos Ltd (ASX: STO) has slipped in the red, trading 0.58% lower at $6.91
• Finally, stock in Beach Energy Ltd (ASX: BPT) has lifted 1.37% to $1.48

Let’s take a closer look at what might be going on with ASX 200 energy shares on Wednesday.

Is this boosting ASX 200 energy shares?

ASX 200 energy shares are outperforming on Wednesday. Their strong performance comes amid reports Nord Stream 1 and 2 may have been damaged in an act of sabotage.

Poland prime minister Mateusz Morawiecki was one official seemingly pointing the finger at Russia. Morawiecki was quoted by ABC News as saying “we see clearly that it’s an act of sabotage, related to the next step of escalation of the situation in Ukraine”.

An unnamed Ukrainian official was said to have labelled the leaks a sabotage. Meanwhile, neither Danish prime minister Mette Frederiksen or Kremlin spokesperson Dmitry Peskov reportedly ruled out sabotage as a possibility.

Nord Stream AG, a consortium of five companies operating 1,224-kilometre gas pipelines through the Baltic Sea, said in a release:

Currently, it is not possible to estimate a timeframe for restoring the gas transport infrastructure. The causes of the incident will be clarified as a result of the investigation.

Whatever the cause of the leaks, they will likely see demand for gas soar in Europe. That’s likely to bolster prices, in turn.

Of course, higher energy commodity prices are generally good news for ASX 200 energy shares.

The sector is also likely benefiting from rising oil prices today. The Brent crude oil price lifted 2.6% overnight to US$86.27 a barrel. Meanwhile, the US Nymex crude oil price gained 2.3% to US$78.50 a barrel.

The commodity’s price rose amid rumours the OPEC+ could cut output targets next month, as my Fool colleague Aaron reports.

The post Could this be pumping ASX 200 energy shares higher on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Why is the Woodside share price beating the ASX 200 on Wednesday?
• 5 things to watch on the ASX 200 on Wednesday
• Woodside share price rebounds as energy stocks surge on Tuesday
• Down 15% in a month, could rate hikes bring more pain for the Beach Energy share price?
• Santos share price higher on $2.2 billion PNG deal

Motley Fool contributor Brooke Cooper 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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