ASX 200 Energy Stocks Surge as Oil Prices Skyrocket Amidst Middle East Tensions

While the overall market might be experiencing a downturn, the energy sector is defying the trend, with ASX 200 energy shares rallying on Monday. This surge follows a significant spike in oil prices that occurred during Friday's trading session.

At the time of writing, here's a snapshot of the market activity:

• Beach Energy Ltd (ASX: BPT) witnessed an impressive 3% rise in its share price, reaching AU$1.58.
• Karoon Energy Ltd (ASX: KAR) marked a 3.5% gain, with shares priced at AU$2.70.
• Santos Ltd (ASX: STO) experienced a 1.5% increase in its share price, climbing to AU$7.75.
• Woodside Energy Group Ltd (ASX: WDS) saw a 1.5% surge, with shares valued at AU$36.20.

So, what's fueling the uptrend in ASX 200 energy stocks?

The remarkable surge in ASX 200 energy shares can be attributed to the substantial uptick in oil prices that unfolded during Friday's trading session. The increase in oil prices was chiefly driven by growing tensions in the Middle East.

According to reports from Bloomberg, the WTI crude oil price catapulted by 5.8% to reach AU$87.69 per barrel, while the Brent crude oil price experienced a 5.7% increase, reaching AU$90.89 per barrel. Consequently, the oil market registered its most substantial weekly increase in almost eight weeks.

However, this surge in oil prices may not bode well for consumers and central banks aiming to curb inflation. Some analysts suggest that oil prices may continue to rise, potentially leading to even higher petrol prices in the near future.

According to Joe DeLaura, a global energy strategist at Rabobank, "we're headed to $100 [a barrel] no matter what this quarter," as reported by the Financial Times. This sentiment was mirrored by Ole Hansen, the head of commodity strategy at Saxo Bank, who stated that "prices could easily get a lot worse [higher] before we find some stabilization. No one in the right frame of mind would hold a short position [in oil] when Israel has just ordered 1 million people to leave [northern] Gaza. That threatens a massive escalation."

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