The lift in the price of oil to six month highs on the threat of Middle East supply disruptions has breathed life into a sector that had been in the doldrums for several months amid slowing global growth which has kept the price under pressure.

An attack on Saudi Arabian oil refineries at the weekend has pushed the price of crude oil up 11 per cent to $US61 ($89) a barrel, its highest level since May.

There is the prospect that the price will remain elevated for several months, thanks to the typical seasonal uplift heading into the northern winter months when demand for oil and also gas for heating purposes rises.

“It is good news for producers, but not so much for explorers, with improved sentiment towards the sector,” said Peter Strachan, an independent analyst. “If Saudi is able to bring capacity back on quickly to make up much of the shortfall, the lift in sentiment may be limited.

“But if the view is that it was easy to knock out this amount of global production, then the positive lift in sentiment could linger.”

On the other side of the ledger, any sustained oil price rise is bad news for Qantas, Virgin, trucking companies and the like.

Worley Parsons (ASX:WOR), the engineering contractor, gained a quick 10 per cent to $14.30.

The oil price rally comes hard on the heels of downgrades to oil price forecasts by analysts due to slowing global economic growth in the wake of the trade war between the US and China.

Just over a week ago, Citi for example cut its September and December quarter oil price forecast by $US10 a barrel to around $US63.

Additionally, it reduced its 2020 forecast for growth in both oil demand and supply.

But if the Saudi production disruption proves to be prolonged, or if there are further disruptions, this could change the outlook for both supply and demand for oil well into the year ahead, giving the sector a further lift.

Leading the gains in the sharemarket were the likes of Sundance Energy (ASX:SEA), with a 25 per cent share price rally to 23.75c.

Investor Thorney Group recently boosted its stake in Sundance ahead of its redomicile to the U.S.

Sundance in particular is known to be a high-cost producer, and any oil price gain will be positive for investor sentiment, even though it has sold forward part of its output which will limit the immediate gains from any price uplift.

Similarly for Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO), with their recent exploration success in the Perth Basin, improved investor sentiment towards the sector should be a positive, since it cost an estimated $20m to drill the successful well, which was well ahead of the $12m budgeted, Strachan said.

“They could see positive sentiment towards any fund raising,” he said.

The same could be true for ADX Energy (ASX:ADX), which recently bought producing acreage in Austria.

“It makes their timing even better,” Strachan said. “It is a perfect time for ADX to raise cash.”

It has to settle the acquisition by the end of October, so a sustained uplift in investor sentiment could make the funding of the purchase easier than would have been the case.

The reflexive gains for most oil and gas stocks has also been positive for small explorer Metgasco (ASX:MEL), which is the subject of a takeover offer from Melbana Energy (ASX:MAY).

Metgasco shares have gained 11 per cent to 5c so far today, putting it out of reach of Melbana, who’s shares were steady at 1.1c.

Melbana is offering four of its shares for each Metgasco share held, which values the target at 4.4c.

At Stockhead, we tell it like it is. While Warrego Energy is a Stockhead advertiser, it did not sponsor this article.