The Woodside Petroleum Limited (ASX: WPL) share price is trading higher on Thursday, up 1.73% to $21.80.
The ASX 200 is about to break even for the week. The Woodside share price has managed to climb 3.1% over the same time period.
Woodside share price rallies on strong oil prices
Oil is gaining momentum in September, especially after OPEC’s monthly oil market report on 15 September.
In the report, it said:
… 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.
Crude oil prices started the month at around US$68.28 a barrel. They have climbed to US$71.8 at the time of writing despite the noise surrounding the Evergrande crisis and the global economy.
According to S&P Global, analysts at Australia and New Zealand Banking Group Ltd (ASX: ANZ) believe that oil sentiment could receive a “further boost” after the United States announced plans to relax air travel restrictions for vaccinated foreign passengers.
ANZ analysts that if the US reopened international borders, it could “add more than 190,000 barrels of jet fuel demand in November”.
In other tailwinds for the Woodside share price, Hurricane Ida has caused major disruptions across offshore oil and gas operators in the Gulf of Mexico. This adds to the narrative of tightening supply as demand picks up.
The US Bureau of Safety and Environmental Enforcement reported on 22 September that approximately 16.18 per cent of oil production in the Gulf of Mexico was currently offline.
It said that undamaged facilities would be back online immediately. However, those that sustained damage would take longer to return to operations.