S&P/ASX 200 Index (ASX: XJO) energy shares have been strong performers over the past 12 months.
Aussie oil and gas stocks, including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS), handily outpaced the returns from the benchmark index over the full year. And they've paid out some juicy dividends to boot.
But November saw that trend reverse, with the ASX 200 energy shares underperforming the benchmark, and they were hit with headwinds from fast-falling crude oil prices.
Brent crude dropped more than 12% from the start of November through to Tuesday, when it was trading for US$83.19. That's the lowest levels seen since early January, before Russia's invasion of Ukraine.
But the Organization of Petroleum Exporting Countries (OPEC) may be about to reverse that trend.
Image source: Getty Images
Is OPEC about to give ASX 200 energy shares a boost?
ASX 200 energy shares owe some thanks to OPEC for helping prop up crude oil prices.
Last month the cartel announced significant output cuts as a slowing global economy dampens demand for oil. That demand has slipped further as China continues to pursue its growth inhibiting COVID zero policies.
Now, as Bloomberg reports, some OPEC delegates have flagged the potential for a fresh round of output cuts when the group meets on 4 December. A move that could usher in fresh tailwinds for ASX 200 energy shares.
Commenting on the upcoming meeting, Charu Chanana, market strategist at Saxo Capital Markets Pte, said:
There is near-term risk to the demand outlook. OPEC+ is likely to remain more concerned about the technical picture in the oil market turning negative, and that is likely to force the cartel to respond.
Potentially related to OPEC's meeting, Brent crude prices gained 2.6% yesterday, trading for US$85.38 per barrel.
Investors in ASX 200 energy shares will also want to keep an eye on Europe. The European nations are hammering out an agreement on just what price level Russian oil exports should be capped at.
Sanctions on Russian oil come into effect on 5 December. Russia's response to those caps, and how well they're enforced, could have a major impact on global oil prices.
