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The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 positions in and has recommended Smartgroup and Super Retail Group. The Motley Fool Australia has recommended Bapcor, IPH, and Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in gold and gold exchange-traded funds (ETFs) has been a trend clearly on the rise in 2024 to date. As we’ve documented here at the Fool extensively this year, new record highs for the price of gold have spurred many investors to take the plunge with a gold-backed investment.

But should investors still be buying ASX gold ETFs in May of 2024? That’s what we’ll be discussing today.

As we’ve just touched on, this year has been an extraordinary one for gold. The precious metal began the year at US$2,077 per ounce but has climbed up to roughly US$2,360 today. That comes after gold hit a new all-time high of around US$2,415 an ounce just last month.

Remember, it was only as recently as late 2018 that gold was asking under US$1,200 for that same ounce. 2022 also saw gold retreat to roughly US$1,600.

So the gold market is unequivocally enjoying a boom.

This, of course, has meant that gold-backed investments like gold miners and precious metal ETFs have also been rising in value.

To illustrate, the VanEck Gold Bullion ETF (ASX: NUGG) – a popular ASX vehicle for gold investment – has soared by almost 25% in value since October.

Other similarly structured ETFs, including the Global X Physical Gold ETF (ASX: GOLD) and the Perth Mint Gold ETF (ASX: PMGOLD), have performed commensurately.

But is there still steam left in this gold rush? Or is it too late to hop on the gold bandwagon?

Should investors still consider gold ETFs in May 2024?

Well, one commentator still preaches that gold is an asset class that investors ignore at their peril. ETF provider Global X (operator of the GOLD ETF listed above) is arguing that gold’s returns over the past ten years, together with its inverse correlation to other assets like shares, make it a great choice as part of a diversified portfolio.

In a discursive piece, Global X found that gold returned an average of 9% per annum over the ten years to April 2024, underperforming the US markets but outperforming ASX shares.

Over an even longer period of time, the report found that gold was advantageous to hold:

Adding gold has increased the annual returns of Australian portfolios for a given amount of risk for most levels of risk and return over the past 20 year…

Gold has had these effects because the gold price is uncorrelated with Australian risk assets (shares, property). Furthermore, and crucially, gold maintains these low correlations while performing relatively strongly over the longer-term. In sum: gold provides diversification that works.

The report also argues that one of gold’s main advantages for investors is the inverse correlation to other asset classes. This results in gold performing an ‘insurance’ role in a diversified portfolio:

In asset allocation, gold’s role is diversification. This makes it different from property, shares, and bonds – which provide income, capital growth and capital stability, respectively….

Insurance is the ultimate form of diversification. When the value of one’s car or house – or whatever else is insured – falls or disappears entirely, an insurance policy can pay out…

While not the same, gold’s role in asset allocation can be understood in similar terms. Gold tends to perform well when other assets struggle, thereby limiting losses. It does this due to its tendency to perform well during crises and its low correlations with other assets.

It should be noted that Global X isn’t exactly unbiased here, even though it runs one of the ASX’s most popular gold-backed ETFs. However, the report makes for some compelling reading for anyone interested in gold as an investment.

The post Should you buy ASX gold ETFs right now? appeared first on The Motley Fool Australia.

More reading

• 3 easy ways to reduce your ASX share portfolio’s volatility right now
• 5 ASX shares to buy for turbulent times
• 3 highly rated ASX gold ETFs to consider buying now
• Is it too late to buy gold as an investment in 2024?

Motley Fool contributor Sebastian Bowen 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.

If you have a very volatile share portfolio, it can be an emotional rollercoaster. Of course, some people love the thrill of rollercoasters – but the rest of us don’t want to feel that sense of anxious apprehension every time we check our share portfolios. We just want nice, slow, dependable wealth accumulation. Nothing fancy, just a few extra dollars in our pocket each week will do it.

Luckily for us, there are many quick and easy ways to reduce the volatility of our share portfolios. In this article, I take a look at three options: diversification, defensive shares, and dollar-cost averaging.

1. Diversification

One of the quickest and easiest ways to reduce your portfolio’s volatility is to diversify your investments. This essentially means buying many different shares or other investments and combining them into one portfolio.

The share prices of different companies will respond differently to different events. For example, news of an interest rate hike will hurt the share prices of growth companies with higher debt levels, as it increases their borrowing costs. However, it could boost the prices of bank and insurance shares, which tend to benefit from higher interest rates.

If you had a portfolio that only consisted of growth shares, you’d be hurt in this scenario. However, if you also owned some banking and finance shares, the gains in their share prices may have offset your other losses. And so, overall, you would have reduced your portfolio’s volatility, simply by being more diversified.

If you don’t have much money to invest but still want to diversify your portfolio quickly, exchange-traded funds (ETFs) are a great option. ETFs trade on the ASX much like ordinary shares but are actually investment funds.

Some are designed to track specific indices, like the iShares Core S&P/ASX200 ETF (ASX: IOZ). Others invest in commodities and other asset classes, like the Global X Physical Gold ETF (ASX: GOLD), which – as the name suggests – invests in gold.

2. Defensive shares

OK, so we’ve agreed that diversification is good if you want to reduce your portfolio’s volatility. But what if there was a particular type of share you could buy to help protect yourself if the rest of the market goes belly-up? As a matter of fact, there is: defensive shares.

Defensive shares belong to companies that tend to do well regardless of the state of the broader economy. They might be consumer staples shares like Coles Group Ltd (ASX: COL), healthcare companies like CSL Ltd (ASX: CSL), or telecommunications companies like Telstra Group Ltd (ASX: TLS). These companies all provide goods and services that people rely on daily, so their profitability is less affected by economic downturns.

Think of defensive shares almost as a type of insurance. When the prices of other stocks are tumbling, defensive shares tend to preserve their value. This means that adding a few of them to your portfolio can help it stay buoyant even when market conditions get choppy.

3. Dollar-cost averaging

Another great way to reduce your portfolio’s volatility is to follow a dollar-cost averaging (‘DCA’) investment strategy. Rather than investing one lump sum upfront, proponents of DCA will invest smaller amounts regularly over time, regardless of market conditions.

Sure, that might not sound that earth-shattering, but the magic of this strategy is best illustrated with a simple example.

Let’s say you wanted to invest $1,000 in Company A, and you could choose between investing your money as one lump sum now, or as five $200 investments each month for each of the next five months. Let’s assume that the current share price is $100, and the prices on the days you make your trades in the next 4 months will be $110, $90, $80, and $95.

If you invested all your money as one lump sum upfront, your shareholding over the next five months would look like this:

Lump Sum	Month 1	Month 2	Month 3	Month 4	Month 5
Shares Purchased	10	0	0	0	0
Total Shares	10	10	10	10	10
Market Price	$100	$110	$90	$80	$95
Value	$1,000	$1,100	$900	$800	$950

In this scenario, you used your $1,000 to purchase 10 shares (each priced at $100) in month 1. By month 5, the price of those shares had dropped by 5% to $95, which meant that the total value of your investment had also dropped by 5%, from $1,000 to $950. Pretty straightforward.

However, an interesting thing happens if you follow a DCA strategy.

DCA	Month 1	Month 2	Month 3	Month 4	Month 5
Shares Purchased	2.0	1.8	2.2	2.5	2.1
Total Shares	2.0	3.8	6.0	8.5	10.6
Market Price	$100	$110	$90	$80	$95
Value	$200	$420	$544	$683	$1,011

In this scenario, you break up your $1,000 into five $200 investments you make each month regardless of the share price. In month 1, you can buy 2 shares with your $200 ($200 investment divided by the $100 share price). In month 2, you can only buy 1.8 shares ($200/$110) because the share price has risen to $110. In month 3, you can buy 2.2 shares ($200/$90) because the share price has fallen to $90, and so on.

Because you can buy more shares when prices are lower, by the end of the 5 months, you would end up with 10.6 shares instead of just 10. This means that the value of your portfolio would be $1,011, a 1% increase on your total investment of $1,000.

In other words, even though the company’s stock price is now lower than 5 months ago, if you followed a DCA strategy you’d still be up! Pretty amazing, right?

The Foolish bottom line

In this article, I covered a few strategies you can adopt to reduce your portfolio’s volatility. You can diversify your portfolio to hedge against certain macroeconomic risks, you can invest more heavily in defensive shares to protect your portfolio against a downturn, and you can dollar-cost average so that you smooth your returns out over time.

However, the right strategy for you will depend on your risk tolerance and personal circumstances. Carefully consider your investing goals and objectives before investing or changing your portfolio strategy. If in doubt, speak to a financial advisor.

The post 3 easy ways to reduce your ASX share portfolio’s volatility right now appeared first on The Motley Fool Australia.

More reading

• Should you buy ASX gold ETFs right now?
• Buy CSL shares for growing dividends and ‘compelling long-term tailwinds’
• The pros and cons of buying Coles shares right now
• How to choose ASX shares for passive income
• Buy these ASX stocks for 4% and 8% dividend yields

Motley Fool contributor Rhys Brock 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 CSL. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Mesoblast Ltd (ASX: MSB) shares have been among the best performers on the Australian share market this year.

Since the start of the year, the allogeneic cellular medicines developer’s shares have risen an astonishing 230%.

This has been driven by optimism that its stem cell therapies may finally be granted approval by the US Food and Drug Administration (FDA) following years of knock backs, cash burn, and capital raisings.

Interestingly, despite more than tripling in value in 2024, one of the company’s insiders continues to snap up Mesoblast’s shares. This appears to be an indication that this board member believes its shares are still good value even after this rise.

Insider buys Mesoblast shares again

According to change of director’s interests notices, Mesoblast’s chief medical officer, Dr Eric Rose, has made two large purchases of shares in the last two weeks.

The first was made on 30 April and saw Dr Rose spend US$142,318.35 on the company’s NASDAQ listed shares. He picked up 21,428 American Depositary Shares (ADS) for an average of US$6.6417 per share.

The chief medical officer then followed that up with a US$151,207.83 purchase on 8 May. This saw Dr Rose snap up 19,734 ADS for an average of US$7.6623 per share.

Should you buy shares?

One leading broker that would approve of these purchases is Bell Potter.

Last month, its analysts retained their speculative buy rating on Mesoblast’s shares with a vastly improved price target of $1.40 (from 58 cents). This implies potential upside of approximately 36% for investors from current levels.

The broker is feeling positive about the company’s Remestemcel product and believes that approval could be around the corner for the treatment of children with steroid refractory acute graft versus host disease (SR a GvHD). Bell Potter explains:

Our best estimate for approval of Remestemcel is mid August 2024. The planned adult study in GvHD has for the moment been postponed pending the outcome of the resubmitted BLA. Valuation is increased from $0.58 to $1.40 eflecting significant changes to revenue forecasts bought about by renewed confidence for a prospective approval for Remestemcel in Paediatric GvHD later this year. A first approval may represent a gateway to a series of label expansions in the ensuing period as reflected in the share price movement in recent days.

Though, it is worth remembering that its speculative buy rating means that Mesoblast shares may only be suitable for investors with a high tolerance for risk.

The post Insider still buying Mesoblast shares despite 230% rise this year: Should you buy? appeared first on The Motley Fool Australia.

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• If you invested $6,000 in Mesoblast shares a month ago you’d have $15,636 now!

Motley Fool contributor James Mickleboro 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.

ASX copper stock Anax Metals Ltd (ASX: ANX) is off to the races on Monday.

Shares in the junior resource explorer closed on Friday trading for 4.4 cents apiece. The Anax Metals share price leapt to 6.3 cents in earlier trade today, putting the stock up a whopping 57%.

Following on some likely profit taking, shares in the ASX copper stock are currently swapping hands for 6.2 cents apiece, up 41%.

For some context, the All Ordinaries Index (ASX: XAO) is down 0.3% at this same time.

Here’s what’s stoking investor interest on Monday.

ASX copper stock rockets on project update

The Anax Metals share price is going ballistic after the company released a promising update on its joint venture Whim Creek Copper Project, located in the West Pilbara region of Western Australia.

Anax owns 80% of Whim Creek, while Develop Global Ltd (ASX: DVP) owns the other 20%.

The ASX copper stock said strengthening copper prices over the past year have added “significant momentum” to the project’s near-term development and recommencement of operations.

At the current US$10,004 per tonne, copper prices are up 21% over the past 12 months.

Anax said key outcomes from its Whim Creek Definitive Feasibility Study (DFS) and Heap Leach Study based on current metal prices and exchange rate inputs have enhanced the project’s economics by 32%.

The miner estimates that under the new prices and rates, the project will generate around $520 million in free cash over the planned eight-year mine life, with a pre-tax net present value (NPV) of $357 million, and an internal rate of return (IRR) of 74%.

That compares very favourably to its estimates in September 2023, with an NPV of $270 million and an IRR of 55%. Anax noted that the price assumptions used in open pit optimisations in the DFS were “markedly lower” than current commodity prices

The ASX copper stock could also be getting a boost, with management flagging the potential to increase the open pit mine life and cash flow through re-optimisation at higher commodity prices.

According to the release, the miner’s Evelyn and Salt Creek copper resource extension exploration will be prioritised, while studies for a regional processing hub strategy have already started.

What did management say?

Regarding the project update sending the ASX copper stock rocketing today, managing director Geoff Laing said, “The Whim Creek asset continues to shape up as a strategic processing hub for the Pilbara.”

Laing continued:

The recent increase in copper and other key metal prices has significantly enhanced project financial metrics. Anax is ideally positioned to benefit from the positive momentum building in copper demand on the back of its critical role in electrification and green technologies.

Laing said the project is “ready for near term production of key energy metals”.

The post ‘Ideally positioned’: Why this ASX copper stock just rocketed 57% appeared first on The Motley Fool Australia.

More reading

• Should you buy ASX gold ETFs right now?
• 3 easy ways to reduce your ASX share portfolio’s volatility right now
• Insider still buying Mesoblast shares despite 230% rise this year: Should you buy?
• Top fundie says this heavily shorted ASX 200 stock is ‘cheaper than it’s worth’
• Leading brokers name 3 ASX shares to buy today

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.

The S&P/ASX 200 Index (ASX: XJO) stock Idp Education Ltd (ASX: IEL) has been picked as an opportunity.

IDP Education offers a number of services including student placement and international English language testing.

Airlie Funds Management is an outfit that focuses on ASX shares, and Emma Fisher is one of the portfolio managers. Fisher recently spoke to the Australian Financial Review.

IDP Education is a contrarian ASX 200 stock pick

Fisher suggests that investing doesn’t need to be about having an epiphany about which trend to follow. She said:

It’s not lightning-bolt moments in the shower where you realise that some secular
megatrend is going to make you all this money. It’s about the nuts and bolts – talking to companies, having an open mind, reading widely.

The balance sheet is a key focus for the investment team and when it comes to value, she said “the lower the share price, the lower the risk”.

Airlie has been buying IDP Education shares following its almost 60% drop from November 2021. A problem has been the company’s key markets of Australia, Canada and the UK have “turned off the taps to immigration”.

The fund manager started buying at $19 and it has dropped to below $16 at the time of writing. Fisher suggested the IDP Education share price could fall further in the short-term – which it has today – but the fund manager is confident the company can succeed even though it’s one of the most shorted stocks on the ASX.

Fisher said:

They’ve got the balance sheet, they’re the leading player, it’s not a capital-intensive industry, and they don’t need much cash to grow, so they’re going to survive a downturn.

You can kind of lean into that fear that the cycle is throwing off, and find a good business that we think is cheaper than it’s worth.

How cheap is the ASX 200 stock?

There are a few different ways to judge a business, so let’s look at the company’s earnings multiple. The price/earnings (P/E) ratio is one of the easiest ways to judge a business.

The forecast on Commsec suggests the company’s earnings per share (EPS) can grow in FY24, FY25 and FY26. The falling valuation, as we can see on the chart below, makes the stock look cheaper and cheaper.

On the current estimates, the IDP Education share price is valued at 27x FY24’s estimated earnings, 24x FY25’s estimated earnings and 21x FY26’s estimated earnings.

The post Top fundie says this heavily shorted ASX 200 stock is ‘cheaper than it’s worth’ appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
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• These are the 10 most shorted ASX shares
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• 10 top ASX shares to buy in May

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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Life360 Inc (ASX: 360)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating on this location technology company’s shares with an improved price target of $17.50. This follows the release of a quarterly update last week. The broker notes that Life360’s update, which was largely pre-released, revealed that its strong growth not only continued in the quarter but also at the start of the new quarter. In light of this very positive momentum, Morgan Stanley has boosted its earnings estimates for the coming years and its valuation for the company accordingly. The Life360 share price is trading at $15.50 on Monday afternoon.

Orica Ltd (ASX: ORI)

A note out of Goldman Sachs reveals that its analysts have resumed coverage on this commercial explosives company’s shares with a buy rating and $21.20 price target. The broker was impressed with Orica’s performance during the first half, noting that its profits were comfortably ahead of both its own and the market’s expectations. In light of this, the broker is feeling even more positive about the company’s outlook. Particularly given its belief that commercial discipline in a balanced ammonium nitrate market will drive uplift in profitability, and that recent acquisitions augment the platform to capture incremental customer share of wallet. This has led to the broker lifting its earnings forecasts accordingly. The Orica share price is fetching $18.16 at the time of writing.

QBE Insurance Group Ltd (ASX: QBE)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating on this insurance giant’s shares with an improved price target of $20.90. This follows the release of a quarterly update that was described as operationally strong. The broker believes some of management’s decisions signal confidence in the company’s capital position and return on equity. It also thinks there is small underlying margin upside risk based on current running yields. All in all, the broker remains positive and highlights that QBE has the strongest exposure to the commercial rate cycle. The QBE share price is trading at $17.51 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why Bellevue Gold, IPH, Life360, and Ramelius Resources shares are racing higher
• What could $10,000 invested in QBE shares be worth in 12 months?
• 5 things to watch on the ASX 200 on Monday
• Why Cettire, De Grey Mining, Life360, and Neuren shares are falling today
• The QBE share price is marching higher on Friday. Here’s why

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. 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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down 0.3% to 7,725.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price is down 3.5% to $28.09. This has been driven by the banking giant’s shares going ex-dividend this morning for its upcoming interim dividend payment. Last week, the big four bank released its half year results and declared an interim dividend of 83 cents per share. Eligible shareholders can now look forward to receiving this 65% franked interim dividend on 1 July. ANZ also revealed that ASIC is investigating the company for suspected contraventions of a number of provisions of the ASIC Act and the Corporations Act.

Fletcher Building Ltd (ASX: FBU)

The Fletcher Building share price is down 10.5% to $2.88. Investors have been hitting the sell button today after the building materials company released a disappointing trading update. Management advised that market conditions across the company’s Materials and Distribution divisions have weakened throughout FY 2024. As a result, it expects to fall short of its EBIT before significant items guidance of NZ$540 million to NZ$640 million. Management now expects a result in the range of NZ$500 million to NZ$530 million for FY 2024. The company also advised that it expects market conditions to remain challenging in both New Zealand and Australia in the near term. It continues to look for opportunities to manage costs against that backdrop.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price is down 2% to $189.54. This has also been driven by the investment bank’s shares going ex-dividend this morning for an upcoming dividend payment. Last week, Macquarie released its full year results and declared a 40% franked final dividend of $3.85 per share. This is scheduled to be paid to eligible shareholders on 2 July.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is down almost 7% to 4.1 cents. This is despite the lithium miner announcing the discovery and expansion of new mineralised zones at its North American Lithium (NAL) operation. Management advised that the newly discovered zones are poised to become a focal point for NAL’s assessment of future mining options. Initial assessments indicate the presence of high-grade lithium mineralisation outside the mineral resource estimate pit shell. It believes this may represent a substantial addition to NAL’s resource portfolio and may contribute to extending NAL’s life of mine.

The post Why ANZ, Fletcher Building, Macquarie, and Sayona Mining shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Why is the Macquarie share price getting hammered on Monday?
• This ASX 200 stock just slashed its earnings guidance by 17%
• What’s happening with the Sayona Mining share price on Monday?
• Why is the ANZ share price sinking today?
• These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) are sliding today.

In afternoon trade on Monday, the ASX 200 is down 0.3%.

Both ASX 200 energy shares are underperforming the benchmark index, with Woodside shares down 1.0% and Santos shares down 1.4% at this same time.

Investors could be favouring their sell buttons today after the oil price retreated over the weekend.

Brent crude oil is down 0.3% at US$82.52 per barrel at time of writing, having recouped some of its earlier intraday losses.

That sees the oil price down almost 8% since 26 April, when that same barrel of Brent was fetching US$89.50.

Here’s what’s happening.

Is Iraq pressuring ASX 200 energy shares?

Some of the pressure on the oil price and ASX 200 energy shares looks to be driven by potential disunity within the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

OPEC+ is scheduled to meet on 1 June to discuss production levels for the second half of the year.

While most analysts believe the cartel will extend its current cuts, Iraq threw those assumptions into doubt over the weekend.

The nation, which counts as the second biggest oil producer in OPEC, has already been producing more than it previously agreed to under existing quotas.

And Iraqi oil Minister Hayyan Abdul Ghani fuelled concerns among oil bulls when he said Iraq would not sign up for any more cuts at the June meeting.

“No, I think Iraq has cut enough and will not agree to any other cut,” he said when asked about extending the OPEC restrictions (quoted by Bloomberg).

Iraq’s deputy oil Minister Basim Mohammed Khudair later tried to smooth the waters, saying his nation is “committed to the voluntary reduction decision within the deadline set by OPEC and its allies”.

So far this month, Iraq has been exporting 3.4 million barrels of oil per day, exceeding the 3.3 million barrels per day production cap it agreed to in March.

Commenting on the outlook for the oil price, and by connection ASX 200 energy shares, Vandana Hari, founder of Vanda Insights said, “I do expect crude to remain under some downward pressure, as the Gaza-related geopolitical risk premium continues to fade.”

Hari was not fussed about the Iraqi oil minister’s reticence about extending supply cuts, calling the issue a “storm in a teacup”.

What else is impacting the oil price?

Headwinds impacting the oil price and pressuring ASX energy shares like Woodside and Santos today have also been blowing out of the world’s top two economies.

In China, the government’s latest inflation and credit data pointed to ongoing economic malaise in the world’s number two economy and top oil importer, which bodes poorly for the medium-term energy demand outlook.

Meanwhile in the United States, it’s the resilient economy that has some analysts forecasting headwinds for the oil price. That’s because the strong economy is likely to entrench inflation further and push out any interest rate cut from the Federal Reserve into late 2024 or even next year.

This, in turn, could stimmy the growth in energy demand needed to boost prices and turn these headwinds into tailwinds for ASX 200 energy shares.

The post ASX 200 energy shares slip as cracks appear in OPEC unity appeared first on The Motley Fool Australia.

More reading

• Guess which ASX energy shares are buys and could deliver huge 12-month returns
• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up last week
• Morgans names the best ASX dividend shares to buy in May
• Where I’d invest $7,000 in ASX dividend stocks right now

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.

Are you wanting some exposure to the energy sector in May? If you are, then it could be worth checking out the two ASX energy shares listed below.

They have just been named as buys by analysts at Morgans. Here’s what the broker is saying:

Karoon Energy Ltd (ASX: KAR)

The first ASX energy share for investors to look at buying is Karoon Energy. It is an oil and gas company operating in Australia, Brazil and Peru.

Analysts at Morgans like the company due to its strong production growth outlook and robust balance sheet. The broker explains:

Unique as a reasonable scale pure conventional oil producer, benefitting directly from rising oil prices. Karoon has significant net cash and is fully funded through a doubling of production over the next 12 months. There are also potential catalysts just around the corner with Karoon flagging at its recent result that it plans to shortly update the market with more detail on its growth plans, Bauna’s outlook, and its ESG approach.

Morgans has an add rating and $2.80 price target on its shares. This implies potential upside of 47% for investors.

Woodside Energy Group Ltd (ASX: WDS)

Morgans is also a big fan of Woodside and sees it as an ASX energy share to buy this month.

This is due to its tier one status and high quality earnings. In addition, the broker believes recent share price weakness has created a buying opportunity for investors. Particularly given the progress it is making with its capex spend. It said:

A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS’s share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions. Increasing our conviction in our call is the progress WDS is making through the current capex phase, while maintaining a healthy balance sheet and healthy dividend profile. WDS still has to address long-term issues in its fundamentals (such as declining production from key projects NWS/Pluto), but will still generate substantial high-quality earnings for years to come.

Morgans has an add rating and $36.00 price target on Woodside’s shares. This suggests potential upside of 27% for investors. In addition, the broker is forecasting a 5% dividend yield over the next 12 months.

The post Guess which ASX energy shares are buys and could deliver huge 12-month returns appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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.