Woodside share price soars again despite CEO forecasting oil prices will pull back

Two workers at an oil rig discuss the rising crude oil price and the impact on the Woodside share price todayTwo workers at an oil rig discuss the rising crude oil price and the impact on the Woodside share price today

The Woodside Energy Group Ltd (ASX: WDS) share price is bouncing again today despite oil price speculation.

The energy company’s shares are currently trading at $35.40, a 1.9% gain. In contrast, the S&P/ASX 200 Index (ASX: XJO) is falling 1.1% today. It’s the seventh trading day in a row the Woodside share price has been in the green.

So why is Woodside climbing higher today?

Oil prices rise

Woodside shares are outperforming fellow ASX oil and gas producers Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) today. The Beach Energy share price is up 1.2%, while the Santos share price is falling 0.7%. The S&P/ASX 200 Energy Index (ASX: XEJ) is lifting by 0.8% today.

Brent crude oil prices are up 0.3% to US$123.95 a barrel, while WTI crude oil is up 0.21% to US122.37 a barrel, according to Bloomberg. However, overnight, oil jumped nearly 3% to a 13-week high amid rising US gasoline demand. Gas prices have also fallen 5% to US$8.25 MMBtu.

Woodside CEO Meg O’Neill, in an appearance on Bloomberg today, predicted oil prices will pull back from the current highs in the long term. Brent crude oil has soared 71% in the past year and 22% in the past month, Trading Economics data shows.

O’Neill said oil prices are “a pretty hard crystal ball to read”. But she said it’s important to look through short-term volatility to long-term health of the market. She told Bloomberg:

We do expect oil prices will come off these highs, but obviously the near-term factors are continuing to be tight and supply is continuing to be tight.

Obviously we’ve got immediate volatility with Russia’s invasion of Ukraine and the strengthening of sanctions. But we’ve got countering factors like OPEC increasing its production. We look through over the long term to what we think global economic growth will look like.

O’Neill said she expects oil prices to “remain high” for the period, but the long-term investment decision-making will have a “bit more sober price outlook”. She said:

One of the things that is going to challenge the industry is that we’ve been underinvesting for the past few years.

So we do need to continue with investment and that will take a bit of time. It will take more time to get new wells online and for the sorts of developments that Woodside does, which are largely offshore deep water that takes years.

Woodside share price snapshot

The Woodside share price has jumped nearly 50% in the past year, while it’s up 61% year to date.

For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) has returned about 31% in the past year.

Woodside has a market capitalisation of more than $67 billion based on the current share price.

The post Woodside share price soars again despite CEO forecasting oil prices will pull back appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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