The Woodside Petroleum Limited (ASX: WPL) share price is making a comeback this week. This comes after it hit a 10-month low of $19.20 last week.
At the time of writing, the Woodside share price is trading 2.63% higher to $21.07.
Woodside share price rises on bullish OPEC outlook
Woodside and the broader energy sector jumped on Tuesday following an upbeat monthly oil market report from OPEC.
OPEC was positive on the outlook for the global economy. It retained its global economic growth forecasts for both 2021 and 2022 at 5.6% and 4.2% respectively.
It said oil demand in the third quarter has proven to be resilient and supported by increasing mobility and travelling activities. However, it flagged increased risks in the near term due to the Delta variant of COVID-19.
As a result, OPEC adjusted its 2H21 oil demand slightly lower and delayed its positive outlook into 1H22.
Looking ahead, OPEC's report said:
In 2022, oil demand is expected to robustly grow by around 4.2 mb/d [million barrels per day], some 0.9 mb/d higher compared to last month's assessment. Revisions were driven by both the OECD [Organisation for Economic Co-operation and Development] 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.
The Woodside share price finished Tuesday's session 6.23% higher at $20.81.
Oil prices continue to gather momentum
Oil prices have pushed another 3% higher since the OPEC report to a 6-week high of approximately US$72.5/barrel.
But oil prices could continue to surprise to the upside.
In an article featured on S&P Global, OANDA senior market analyst Ed Moya was bullish on the upside risk for crude oil, saying:
Oil's rally is nowhere near over as both demand and supply drivers are still mostly bullish: further delays in making progress with the Iran nuclear deal, a cold winter, and further production disruptions from a very active hurricane season.
TD Securities head of commodity strategy Bart Melek also commented:
Given the larger-than-expected reduction in US and global production estimates and the upgrade of demand projections by agencies such as the IEA, the crude market will likely continue to get support from enthusiastic bullish money managers.
Woodside share price playing catch up
The Woodside share price is down more than 8% year-to-date despite oil prices trading at almost 2-year highs. However, it is up around 14% over the past 12 months.
