Oil fuels a three-month high

THE Australian share market hit a three-month high yesterday as surging oil prices fuelled a second straight day of big gains for the energy sector.

The ASX200 added 10.7 points, or 0.2 per cent, to 6118.7 points, while the broader All Ordinaries gained 11.5 points, or 0.2 per cent, to 6215.9 points.

The prospect of US sanctions against Iran is lifting oil prices, amid investor nerves about rising risks of conflict and the impact on oil supplies.

Shares in local producers rose sharply as a result, Fairmont Equities managing director Michael Gable said, taking the energy sector to its highest level in almost three years.

Woodside Petroleum gained 5.1 per cent to $34, Oil Search added 4.8 per cent to $8.48 and Santos edged 0.2 per cent higher to $6.26.

With energy stocks running hot, the share market is at its highest level since February 2, and nearing the 10-year highs it hit in January, Mr Gable said.

“For the first time in a very long time the ASX has actually outperformed the US market over the past several weeks,” Mr Gable said.

Higher base metal prices lifted the miners, with BHP Billiton up 1.7 per cent at $32.75, Rio Tinto 1.6 per cent at $82.95 and gold miner Newcrest up 1 per cent to $22.13.

The major banks were mixed, with ANZ up 0.5 per cent at $28.08, Westpac up 0.3 per cent at $29.85, NAB down 0.5 per cent at $28.58 and Commonwealth Bank 0.6 per cent weaker at $70.98. AAP