Top 10 ASX oil stocks (2021) and the memory of negative oil

A wild year for oil prices

One of the great surprises of 2020 was negative oil.

When we published this article last year in March we stressed just how impacted the oil complex had been by the coronavirus pandemic, noting that a supply-demand crunch brought on by the pandemic was seeing oil prices slide precipitously.

Moreover, when we wrote this piece, there was seemingly no notion that oil prices could or would turn negative. They after all, never had. What brought us there was a weird quirk in the markets – a collision between the fine print of the WTI futures contract, a lack of physical storage space and yes, a Covid-19 induced supply-demand crunch which hit oil prices across the board.

So then in late April, with US storage space practically full and liquidity for West Texas Intermediate’s (WTI) May contract quickly drying up and then all but evaporating, we would see the WTI May contract close at negative US$37.63 a barrel, on Monday, April 20, 2020.

And at the time, there was a sense that anything could happen next. That the assumed rules of play had been irrevocably changed. Paul Sankey, MD at Mizuho Bank told CNBC:

‘If you had a stinking barrel of oil in your back yard, would you pay someone $100 to take it away? Yes, and you would probably be relieved you were not charged $300. That is the situation we are in.’

He even went as far to ask: ‘Will we hit -$100 a barrel next month? Quite possibly.’

Oil never got there. The panic, in retrospect was overdone. Storage issues abated and demand has recovered to a degree. Indeed, since bottoming out in 2020, oil has slowly ticked higher, with WTI last trading a shade below US$70 a barrel and Brent at around US$72 a barrel – a far cry from the dour prices recorded last April.

Top ASX-listed oil stocks

With oil prices still in ‘rebound mode’, below we take a brief look at some of the ASX’s most dominant oil stocks or stocks with significant oil exposure as well as their recent share price performances.

_{*Data contained within the above table was correct as of the market close 3 March, 2021.}

How to trade ASX oil stocks

Investors can trade any of the top 10 ASX oil stocks highlighted above, utilising CFDs, through IG’s world-class trading platform. For example, to buy (long) or sell (short) Woodside Petroleum using CFDs, follow these steps:

• Create an IG Trading Account or log in to your existing account
• Enter ‘Woodside Petroleum’ in the search bar and select it
• Choose your position size
• Click on ‘buy’ or ‘sell’ in the deal ticket
• Confirm the trade