The Woodside share price is down 6% in December. What’s next?

The Woodside Energy Group Ltd (ASX: WDS) share price is down 3.2% in early afternoon trade.

The S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $36.00 per share and is currently trading for $34.84 per share.

With oil prices down again overnight, energy stocks are broadly underperforming today. At the time of writing, the S&P/ASX 200 Energy Index (ASX: XEJ) is down 2.3% compared to a 0.7% loss posted by the benchmark index.

Factoring in today’s intraday losses, the Woodside share price is down 6.5% since the closing bell sounded on 30 November.

So, what can ASX 200 investors expect next?

What’s ahead for the ASX 200 oil and gas company?

Looking ahead to the rest of December, the biggest impact on the Woodside share price is going to be the price of crude oil and natural gas. That’s with the company’s rather underwhelming third-quarter production guidance delivered last month now already factored into current valuations.

As for crude oil prices, Brent crude has dipped from US$79.35 per barrel yesterday to US$77.44 per barrel today. The 2.4% drop sees Brent crude trading for another new low for 2022.

It was only back in March that Brent was fetching right around US$128 per barrel.

While our crystal ball is no clearer than yours, crude prices over the remainder of December are likely to continue battling recent headwinds.

Those include investor concerns over a slowing global economy, alongside the G7 nations imposing a price cap on Russian oil exports.

Supplies also appear to be building in the world’s top economy, likely due to lower demand. Yesterday the US Energy Information Administration (EIA) reported an increase in distillate and gasoline inventories.

And according to Rebecca Babin, a senior energy trader at CIBC Private Wealth Management, energy investors are taking a cautious approach.

“There is literally no risk appetite to buy the dip in crude right now. This is just snowballing into outsize moves,” Babin said (quoted by Bloomberg).

Barring any unexpected events, it’s unlikely crude oil will see a strong rally in December. That will likely see the Woodside share price struggle to post the strong gains the company enjoyed for much of 2022.

Though one tailwind worth noting is China’s moves to reopen from its COVID zero policies. That may not lead to an immediate boost in energy demand, but heading into 2023, the removal of citywide lockdowns should see Chinese consumers and businesses burning a lot more oil and gas.

Woodside share price snapshot

As you can see in the chart below, the Woodside share price is up an impressive 54% in 2022. To put that in some context, the ASX 200 is down 5% year to date.

The post The Woodside share price is down 6% in December. What’s next? appeared first on The Motley Fool Australia.

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More reading

• Woodside share price slides as oil sinks to 2022 low
• 5 things to watch on the ASX 200 on Wednesday
• If I bought $10,000 Woodside shares at the start of the year, how much would they be worth now?
• 5 popular ASX 200 stocks I’m avoiding, plus one that still looks dirt cheap
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Bernd Struben 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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