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Investors are showing renewed interest in Woodside Energy Group Ltd (ASX:WDS) shares on Tuesday, with the stock trading at AU$23.94, reflecting a 0.6% increase from yesterday's close at AU$23.79. This positive movement comes as the broader S&P/ASX 200 Index (ASX:XJO) also rises by 0.6% at the same time.
In contrast, Woodside's competitors are experiencing mixed results: Santos Ltd (ASX:STO) shares are down 0.2%, while Beach Energy Ltd (ASX:BPT) shares have risen by 0.7%.
Oil Prices Rebound from Multi-Year Lows
Woodside’s share price increase is linked to a rebound in global oil prices. Recent declines in oil and gas prices had been driven by concerns over weak demand from major economies like the United States and China. On Friday, Brent crude oil fell to AU$71.06 per barrel, marking its lowest level since December 2021.
However, oil prices have since ticked higher. Following a weekend meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), and the impact of Tropical Storm Francine on the US Gulf Coast, Brent crude has risen to AU$71.84 per barrel—a 1.1% increase from Friday’s lows.
OPEC+ Production Decisions and Hurricane Impact
OPEC+ has contributed to the price uplift by delaying its planned production restoration. The cartel had initially planned to gradually increase production by 180,000 barrels per day in October, with a total increase of 540,000 barrels per day by year-end. However, this increase has been postponed by two months in response to falling prices.
Amrita Sen, director of research at Energy Aspects, commented on OPEC+'s decision, stating, “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.”
In addition to OPEC+'s decision, Tropical Storm Francine’s impact on the US Gulf Coast is also influencing oil prices. The storm, which is expected to strengthen to hurricane status, has already led to production halts and crew evacuations in the region—home to nearly half of the US oil refining capacity.
Dennis Kissler, senior vice president for trading at BOK Financial Securities, noted that the recent selloff in oil prices may have been overdone. “The market is nearing an oversold condition and has perhaps fallen too far, too fast,” Kissler said.
Long-Term Performance
Despite the recent uptick, Woodside shares remain down 37% over the past 12 months, reflecting ongoing challenges in the energy sector. The current rise in oil prices and adjustments by OPEC+ provide a glimmer of hope for recovery, but the broader market conditions and geopolitical factors will continue to play a significant role in the stock's performance.
