The ASX started well but fell to the ground at the closing bell.
The S&P/ASX200 lost 86.50 points or 1.22% to 7,024.30. Over the last five days, the index has lost 0.35% and 4.67% over the last 52 weeks.
The worst performing stocks in this index are Imugene Ltd (ASX:IMU, OTC:IUGNF) down 10.20% and Qantas Airways (ASX:QAN) Ltd down 8.54%.
Qantas led the sell-off in travel shares. Flight Center fell 5.9% to $16.75 and business travel fell 5.4
Qantas is paying for rising oil prices in a number of ways, with the Commsec predicting oil will be above $2 a liter across Australia.
Although we have seen these prices in Melbourne, the overall average has so far been below the magic two dollar mark.
Everything is ready to change.
Oil will reach record prices
Commsec’s Craig James predicts gasoline prices will climb well above $2 a liter in the coming weeks.
The Russian invasion of Ukraine continues to push global oil prices to near all-time highs.
According to the Australian Petroleum Institute, the national average price of unleaded petrol rose 3.3 cents per liter to a record 183.9 c/l in the week to March 6. Last week petrol prices hit record average highs in Melbourne (191.3c/l), Hobart (196.9c/l), Darwin (189.7c/l) and Canberra (188.6c/l) .
CommSec Chief Economist Craig James points to a lag of a few weeks before rising crude prices trickle down to petrol pumps across Australia.
“The national average gasoline price rose 10 cents per liter after a $10 per barrel increase in crude oil in December and there was a similar increase of 10 cents in February to $1.80 per liter after that Brent crude went from $79 a barrel to $89 a barrel in January,” James says.
“Crude Brent is now at $128 a barrel, so the Australian average pump price is on track to reach $2.10 to $2.20 a liter over the next few weeks.”
Investors fear direct sanctions on the Russian oil sector and for good reason… Russia is the world’s second largest oil exporter, exporting 4 to 5 million barrels of oil per day.
As supplies are depleted, OPEC+ sits idly by and sticks to its guns of a gradual increase in production.
So no help there.
OPEC includes Russia.
Meanwhile, Woodside Petroleum Limited (ASX:WPL) is up 9% at $34.25 while Santos Ltd (ASX:STO) climbed 5.8% at $8.21, Beach Energy Ltd is trading up 5.1% to $1.75 and Whitehaven Coal Ltd added 4.8% to $4.18.
On the front of the little cap
Energy and gold stocks in particular did well today.