The Woodside Petroleum Limited (ASX: WPL) share price edged lower last week as the International Energy Agency (IEA) provided an update on its 2021 forecasts.
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Why is the Woodside share price under pressure?
The IEA cut global oil consumption estimates for 2021 as the coronavirus pandemic continues. The leading energy body cut demand forecasts by 200,000 barrels per day due to limited travel and economic activity.
The Woodside share price fell 2.0% lower last week despite the IEA noting more robust prospects for the second half of the year. Decreased supply and vaccine rollout efforts look set to increase drawdown of inventory towards the end of 2021. That uptick in demand could see somewhat of a pricing rebound towards the end of the year.
The powerful OPEC+ oil alliance has held back production in an effort to stabilise oil prices. "Demand is running ahead of supply and oil inventories are falling very, very sharply," said Toril Bosoni, Head of the IEA's Oil Market and Industry division.
The Woodside share price continues to be under pressure after falling sharply in the last year. Shares in the leading oil exploration and production group were down 26.0% over the past 12 months to close at $24.98 per share on Friday.
Most of those losses occurred in the March 2020 bear market, with the Woodside share price recovering 63.6% since 23 March.
Woodside isn't the only ASX share experiencing valuation pressure right now. The Santos Ltd (ASX: STO) share price has fallen 17.3% in the last year despite a 5.9% gain in 2021.
The IEA wasn't the only group to provide an outlook for oil in 2021. OPEC trimmed its forecast for a global rebound in oil demand in its February 2021 report.
OPEC is still seeing stronger forecast demand and signs that rivals may be faltering but cut its January 2021 forecasts by 100,000 barrels per day to 96.1 million barrels.
Foolish takeaway
The Woodside share price has been under pressure in recent months. The difficulty in forecasting global oil demand amid the COVID-19 pandemic continues to drive share price volatility. The Aussie oil producer is set to release its full-year results to the market this Thursday.
