Why is the Santos share price all over the pitch on Wednesday?
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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.