The Woodside Energy Group Ltd (ASX: WDS) share price is steaming ahead this year.
Woodside shares have soared more than 50% year to date to $32.95. For perspective, the S&P/ASX 200 Index (ASX: XJO) has fallen nearly 11% year to date.
A recent Federal Government report predicts LNG (liquefied natural gas) export earnings to lift in the 2023 financial year. Let’s take a look at this in more detail.
LNG export earnings tipped to rise
Woodside is a major oil and gas producer. In fact, around 70% of Woodside’s assets are used for gas production.
A recent resources and energy report from the Federal Industry Department is predicting LNG export earnings to soar by 28.6% in the 2023 financial year from $70 billion to $90 billion.
However, the author tips LNG export volumes will ease and stabilise to 81 million tonnes by 2024. Export revenue is predicted to fall to $81 billion in the 2024 financial year.
The fallout from Russia’s invasion of Ukraine is placing “upward pressure on LNG spot prices,” the report states, adding:
Russian gas flows to Europe have fallen 78% year-on-year from 373 million cubic meters per day mcm/d) in September 2021 to 81 mcm/d in September 2022. If the current flows are sustained for a year, Europe could lose roughly 78 Mt of LNG-equivalent gas.
This figure is roughly equivalent to 21% of the global LNG trade in 2021 or 92% of Australia’s total LNG exports in FY21-22.
Globally, the report noted lockdowns are impacting Chinese LNG imports. However, imports account for only 25% of China’s gas. Japan’s LNG imports rose 8.5% in the June quarter, while Chinese LNG imports fell 28%. Total European LNG imports in the June quarter fell 4.9%.
Meanwhile, the department forecast oil export earnings to lift in the 2023 financial year before declining. The report said:
Australian oil export earnings rose by 88% to $14.0 billion in 2021-22, due to the surge in oil prices. Elevated prices and a weak AUD/USD should see earnings reach $15.0 billion in 2022-23. Earnings for 2023-24 are forecast at $13.4 billion, as prices fall from 2022-23 levels.
Woodside share price snapshot
The Woodside share price has risen 30% in the past year, while it has climbed nearly 1% in the last month. In the last week, however, Woodside shares have fallen 3%.
For perspective, the ASX 200 has fallen 8.4% in the past year.
Woodside has a market capitalisation of nearly $63 billion based on the current share price.
The post Could this spell good news for the Woodside share price? appeared first on The Motley Fool Australia.
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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. 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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