Woodside Energy Group Ltd (ASX: WDS) saw its share price rise by 0.6% to $23.94 in morning trading today, following a period of flat performance at $23.79 per share. This uptick comes amid a broader recovery in oil prices from recent lows.
The S&P/ASX 200 Index (ASX: XJO), of which Woodside is a part, also gained 0.6% in early trading today. In contrast, Woodside’s chief competitors showed mixed results: Santos Ltd (ASX: STO) saw a 0.2% decline in its share price, while Beach Energy Ltd (ASX: BPT) experienced a 0.7% increase.
The recent rise in Woodside’s share price is attributed to two key factors: a rebound in global oil prices and significant developments within the oil market. On Friday, Brent crude oil had dropped to $71.06 per barrel, its lowest level since December 2021. However, following a weekend meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), and with a hurricane forming in the US Gulf Coast, oil prices began to recover. As of today, Brent crude is priced at $71.84 per barrel, marking a 1.1% increase from Friday’s lows.
OPEC+ has decided to delay its planned production increase by two months in response to the recent price slump. The cartel had previously planned to gradually restore 2.2 million barrels per day of production starting in October, but this will now be postponed. This decision aims to stabilize the market amid weak demand signals.
Amrita Sen, director of research at Energy Aspects, commented to The Financial Times, “OPEC+ have always stated they will adjust their policy depending on market conditions and that is exactly what they did as demand indications recently have been weak.”
Additionally, Tropical Storm Francine, which is expected to strengthen into a hurricane, has already caused disruptions in the US Gulf Coast oil production. The storm’s impact on nearly half of the US oil refining capacity could further support oil prices.
Dennis Kissler, senior vice president for trading at BOK Financial Securities, noted that the recent selloff in oil prices may have been excessive. “The latest selloff of nearly $9 a barrel has been a bit overexaggerated. The market is nearing an oversold condition and has perhaps fallen too far, too fast,” Kissler told.
Despite today’s gains, Woodside’s share price remains down 37% over the past 12 months.
For investors considering Woodside Petroleum Ltd, Motley Fool investing expert Scott Phillips has highlighted alternative stocks as more promising investments at this time.
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