The Woodside Petroleum Ltd (ASX: WPL) share price has had a topsy-turvy year in 2021. Shares in the Aussie energy giant have muddled along, climbing to $23.75 in early trading today, 1.32% higher than last week's closing price.
So, what's the outlook like for one of Australia's largest listed shares right now?
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The outlook for the Woodside share price
The Perth-based energy company's primary focus is on oil and gas production across the globe. According to the company's 2020 annual report, the vast majority of Woodside's US$3,600 million operating revenue came from natural gas.
In fact, liquefied natural gas (LNG) delivered annual revenue of US$2,519 million or 73% of operating revenue during the 2020 financial year.
A look at forecast market dynamics for Aussie gas could help piece together the outlook for the Woodside share price. This is where the 2021 Gas Statement of Opportunities (GSOO) report by the Australian Energy Market Operator (AEMO) may help.
The 2021 GSOO report notably forecasts an "improved gas supply outlook compared to last year" which means more supply in the market and reduced capital investment to expand output capabilities.
According to the report, lower gas prices have contributed to a "challenging investment environment" for new production.
Another factor driving ASX energy shares right now is fluctuating crude oil prices. The Woodside share price has spiked 5.2% in July thanks to ongoing tensions in the OPEC+ oil cartel.
A continuing spat between large producers Saudi Arabia and the United Arab Emirates (UAE) has propelled Brent and WTI prices higher in recent days.
Higher base prices in both oil and gas would be welcome news for the Woodside share price. Increased commodity prices translate to higher company earnings (all else being equal) due to higher realised prices.
Analyst research can also be a useful analysis tool. A Goldman Sachs note on April 22 2021, sourced from broker CommSec, maintained the Woodside share price as a "Buy" with a $33.85 per share price target.
That update, which revised the target price down from $34.10 per share, noted Woodside's strong spot LNG exposure with upside risk to commodity pricing through the remainder of 2021.
Foolish takeaway
COVID-19 has created uncertainty in global energy markets with difficulties in accurately forecasting future demand. The Woodside share price has climbed 1.6% despite this uncertainty and is sitting 15.1% shy of its 52-week high.
Shares in the Aussie oil and gas giant are worth watching in 2021 with some analysts bullish on the ASX 200 share against the current backdrop.
