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Is the Woodside Petroleum share price in the buy zone?

falling oil price

The Woodside Petroleum Limited (ASX: WPL) share price has crashed lower and is trading at a new 52-week low. So, is the Aussie oil and gas group in the buy zone or should you wait this out?

Why the Woodside Petroleum share price is at a 52-week low

Shares in the Aussie oil and gas producer have fallen 23.27% lower since the start of 2020. The Woodside Petroleum share price is now trading at a 52-week low of $26.38 and could be a good value buy.

The oil and gas sector has been hit hard by falling crude oil prices in recent weeks. Concerns over the coronavirus outbreak have hit global economic growth and the long-standing OPEC (Organisation of the Petroleum Exporting Countries) cartel has waivered, with the Woodside Petroleum share price falling in the process.

OPEC and Russia are at loggerheads over how to control the crude oil supply in the wake of the coronavirus concerns. Demand for crude is dropping as businesses scale back and/or shut down in the wake of the health epidemic. However, Russia has slapped down a deal from the Saudi Arabia-led OPEC group on how to maintain high prices through supply cuts. Saudi Arabia responded by making deep price cuts in an attempt to push supply into the market. This looms as the potential for an all-out commodities war and the ball looks to be in Russia’s court at this stage.

Closer to home, this is hitting Woodside Petroleum shares and other ASX oil producers hard. Falling prices mean lower earnings which investors have factored into these companies’ share prices. Crude oil prices are down over 30% since the start of the year but some of the S&P/ASX 200 (INDEXASX: XJO) oil and gas groups are down just as much.

The Beach Energy Ltd (ASX: BPT) share price has slumped 34.26% while Oil Search Limited (ASX: OSH) shares are down 29.79% in 2020.

Is now the time to buy Woodside Petroleum shares?

I think the coronavirus outbreak has too many unknowns to say what’s undervalued right now. The Woodside Petroleum share price could be good value, but that’s only if the crude oil price rebounds.

With the OPEC-Russia tensions showing no sign of early resolution, it’d take a brave investor to buy in right now.

Where to invest $1,000 right now

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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