Oil stocks hit as Brent price plunges on Shanghai lockdowns, as ASX rises

Australian stocks rise, but oil stocks suffer, as the price of Brent plunges on new blockages in China.

As of 10:45 a.m. AEDT, the ASX 200 was up 0.6%. This is its sixth consecutive uptrend day.

Best performing stocks include Polynovo (+4.3pc), Megaport (+4.2pc) and Charter Hall (+3.9pc).

Oil stocks Beach Energy and Santos are down 3.3% and 2.1% respectively.

It comes as the price of oil has fallen again as Shanghai heads for another round of COVID lockdowns, potentially alleviating concerns about a global supply shortage.

As of 7:00 a.m. AEDT, the price of Brent crude had fallen 9.2% to US$109.60 a barrel.

The price fluctuated to historic highs near the war in Ukraine. The country that invaded it, Russia, is one of the biggest oil producers in the world.

High oil prices have heightened inflation fears globally and pushed up prices at the pumps, including in Australia.

Trading on Wall Street was generally muted on Monday, but was boosted by a rise in Tesla shares.

Shares of the electric carmaker rose 8% after announcing it would split its shares to pay a dividend.

This sent the Nasdaq up 1.3%. The other two majors rose between 0.3% and 0.7% after afternoon trading calmed down.

Bitcoin gained almost 8% as it continued its recovery.

The Australian dollar was trading near 74.90 US cents at the US close.

Inflation worries growing in Australia

Meanwhile, as the price of oil continues to put upward pressure on inflation in Australia and around the world, the latest consumer confidence data from ANZ shows that worries about price hikes increase.

“Inflation expectations jumped 0.4 points last week to a multi-year high of 6.4% of respondents, even as gasoline prices fell slightly,” said David Plank, head of inflation. economy at ANZ.

“Consumer confidence remained virtually unchanged despite this, with a slight decline of just 0.1%.

“In detail, however, sentiment towards ‘current financial conditions’ has fallen to its lowest since May 2020.

“Consumer confidence is very weak given the strength in employment, which we believe is directly linked to concerns about cost of living pressures.”

It revealed that more respondents now wanted to put off purchasing major household items.

The federal government is expected to unveil a series of measures in its budget tonight aimed at alleviating cost-of-living concerns.

“Australia’s federal budget appears to be a very traditional election budget,” Clifford Bennett, chief economist at ACY Securities, said in a briefing today.

“So much so that the market implications will be fully mitigated.”


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Felix J. Dixon