Woodside shares lift today. Is the worst behind this ASX energy giant?

Shares in Woodside Energy Group Ltd (ASX: WDS) are moving higher today, climbing 2.23% to $23.83 in late afternoon trade.

The bounce comes after a difficult year for investors. Despite today’s strength, Woodside shares remain down around 8% over the past 12 months, reflecting softer energy prices and cautious sentiment toward large oil and gas producers.

So, what is driving today’s move, and could this rally have more room to run?

A steady business, but sentiment has been weak

Woodside is Australia’s largest independent oil and gas producer, with major LNG and energy assets across Australia, the US, and international markets.

Operationally, the business remains solid. Woodside continues to generate strong cash flow, maintain a healthy balance sheet, and return capital to shareholders through dividends. Its trailing dividend yield currently sits around 7%, which remains attractive for income-focused investors.

However, sentiment toward the stock has been weighed down by weaker oil prices over the past year and uncertainty around future demand growth. That pressure has kept Woodside shares range-bound for much of 2025.

Technical signs point to a short-term shift

From a technical perspective, Woodside’s recent price action is becoming more interesting.

In mid to late December, the stock slipped into oversold territory, with the RSI falling into the low 20s. That level often signals selling exhaustion rather than fresh downside momentum. Since then, Woodside shares have stabilised and started to trend higher.

The share price has also moved back inside its Bollinger Bands after spending time below the lower band. That typically suggests downside pressure is easing. While this does not confirm a long-term trend change, it often supports a short-term rebound.

Key support appears to be forming around the $22.50 to $23 range, while near-term resistance sits closer to $25.

Oil prices provide a tailwind

Energy prices have helped sentiment in recent sessions. Oil has pushed higher this month amid renewed geopolitical tensions and concerns about supply disruptions. Even modest oil price rebounds can have a huge impact on large producers like Woodside, especially after a period of weakness.

Looking ahead, Woodside’s earnings and share price will remain closely linked to movements in oil and LNG prices. Any sustained recovery in commodities would likely support further upside.

What should investors watch next?

Today’s move does not alter the long-term outlook, but it suggests that selling pressure may be easing. For income investors, Woodside’s dividend yield remains a key attraction. For traders, the recent rebound from oversold levels could signal improving short-term momentum.

The next test will be whether Woodside can hold above recent support and push through resistance in the weeks ahead. If it can, sentiment may slowly begin to turn.

However, for now, it may make sense for investors to watch Woodside from the sidelines until the company reports its full-year results late next month.

The post Woodside shares lift today. Is the worst behind this ASX energy giant? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.