The Woodside Petroleum Limited (ASX: WPL) share price is booming on Tuesday, up 5.82% to $20.73.
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What's driving the Woodside share price?
Oil prices jump overnight
Oil prices posted strong gains overnight with crude oil rallying 2.63% to US$70.35/barrel.
The uptick in oil prices is driving broad-based buying across the energy sector with the S&P/ASX 200 Energy (INDEXASX: XEJ) index up 4.02%.
Woodside share price peers Oil Search Ltd (ASX: OSH), Santos Ltd (ASX: STO) and Beach Energy Ltd (ASX: BPT) are also rallying, up 4.95%, 4.38% and 7.21% respectively.
OPEC monthly oil market report
OPEC's monthly oil market report covers major issues affecting the oil market and provides an outlook for crude oil market developments.
OPEC released its report overnight, revealing a more bullish view of the global economy and oil demand.
It upgraded its global oil forecasts, citing that oil demand will exceed pre-pandemic levels in 2022.
In 2022, oil demand is expected to robustly grow by around 4.2 mb/d, some 0.9 mb/d higher compared to last month's assessment. Revisions were driven by both the OECD and non-OECD, as the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions. Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding prepandemic levels.
In anticipation of increased demand, OPEC and its allies agreed to steadily increase production.
OPEC and non-OPEC participating countries in the Declaration of Cooperation (DoC) have agreed to adjust upward their overall production by 0.4 mb/d on a monthly basis starting August 2021. Several other non-OPEC producers also raised their production in July.
Woodside share price snapshot
The Woodside share price is down 9% year-to-date despite oil prices trading well above pre-COVID levels.
