Aussie shares hit 3-month highpoint

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

The benchmark S&P/ ASX200 added 10.7 points, or 0.2 per cent, to 6,118.7 points, while the broader All Ordinaries index gained 11.5 points, or 0.2 per cent, to 6,215.9 points.

The prospect of US sanctions against Iran is lifting oil prices, amid investor nerves about rising risks of conflict in the Middle East 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 index to its highest level in almost three years.

Woodside Petroleum gained 5.1 per cent to $34.00, Oil Search added 4.8 per cent to $8.48, Santos edged 0.2 per cent higher to $6.26 and Origin Energy moderated in afternoon trade to add 0.1 per cent to $9.95.

With energy stocks running hot, the share market is at its highest level since February 2, and nearing the ten-year highs it hit in January, Mr Gable said. “For the first time in a very long time the ASX has actually out-performed the US market over the past several weeks,” Mr Gable said.

“Once those oil stocks cool off the market is likely to have a shallow consolidation as investors plot their next move.”

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

Higher commodity prices have lifted the Australian dollar from the 11 month low hit on Wednesday.