2 ASX energy shares that brokers rate as buys for exposure to sky high oil prices

A graphic depicting a businessman in a business suit standing with his hand to his chin looking at a large red arrow pointing upwards above a line up of oil barrels againist the backdrop of a world map.

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With oil prices storming higher this year, the energy sector has been a great place to invest.

The good news is that one leading broker still sees plenty of upside for a couple of popular energy shares. Here’s what analysts at Morgans are saying about them:

The team at Morgans is very positive on Santos. Its analysts rate the energy producer highly due to its growth potential and diversified earnings base.

The broker explained:

We expect the resilience of STO’s growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

Morgans has an add rating and $10.00 price target on Santos’ shares. This compares favourably to the current Santos share price of $8.08.

Woodside Energy Group Ltd (ASX: WPL)

Another ASX energy share that Morgans rates highly is Woodside. The broker is bullish thanks largely to its upcoming merger with the petroleum assets of BHP Group Ltd (ASX: BHP). This merger was approved by shareholders last week.

Morgans commented:

We believe WPL has benefited from being in the right place, at the right time. With: 1) BHP/WPL having an existing relationship, 2) BHP eager to boost its ESG profile, and 3) WPL being a quality operator (safe hands which is important for BHP). From an economic standpoint we think WPL is getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bn pa and growth options.

Morgans has an add rating and $33.60 price target on the company’s shares. This is meaningfully higher than the current Woodside share price of $28.77.

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