MS sees stabilisation in Australian upstream energy, tips Karoon as top pick

Origin Energy

04/09/2025 03:57

** Analysts at Morgan Stanley say Australia's upstream energy sector is displaying signs of stability, with oil and LNG prices holding firm

** Brokerage sees a scope for a reversal in recent earnings downgrade

** Flags upside risks embedded in options pricing, highlights Karoon Energy KAR.AX as its preferred name for near-term upside

** MS keeps Beach Energy BPT.AX and Origin Energy ORG.AX at the bottom of its pecking order

** Key catalysts into year-end include the East Coast gas review, first gas from BPT's Waitsia 2 project, and Santos'  STO.AX Barossa project in Q325

** Australia's energy index .AXEJ down 0.7% after a slide in oil prices as investors look ahead to a weekend meeting of OPEC+ where producers are expected to consider increase in output targets

 (Reporting by Rishav Chatterjee in Bengaluru)

 ((Rishav.Chatterjee@thomsonreuters.com;))