The S&P/ASX 200 Index (ASX: XJO) managed to finally have a day in the green today. The ASX 200 closed this Thursday at 7,311.7 points, up a healthy 0.54%. But one ASX 200 share didn't get the invite. That would be the Woodside Petroleum Limited (ASX: WPL) share price.
Woodside shares had a clanger today. This ASX energy share closed today's trading session at $24.99 a share, down 1.23%. That puts Woodside in the upper-middle of its 52-week range ($17.17 to $27.60).
So why did the Woodside share price go backwards when the broader market powered forwards today?
The first thing we should look at for an oil driller like Woodside is the price of crude oil itself. Since Woodside's business model revolves around drilling 'black gold' out of the ground, any changes to the underlying price of crude oil directly influence this company's profitability.
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Why did the Woodside share price underperform the ASX 200?
Lo and behold, oil markets have been a little shaky over the past day or so. As my Fool colleague James heralded this morning, West Texas Intermediate (WTI) crude oil slid overnight, falling 0.2% to US$80.50 a barrel. Brent crude also fell by a similar amount to US$83.24.
While this slide might not look like anything too significant, especially seeing as it still leaves oil at a historically high level, it could be causing concern on the demand side of the market. As we reported this morning, "demand concerns appear to be the reason behind the softening oil prices".
This thesis gels with what other ASX oil companies did today. Woodside wasn't the only share in the energy space to go backwards. Woodside's fellow drillers Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH) also lost steam. Santos shares ended up losing 1.34% to $7.34 today, while Oil Search fell 0.66% to $4.54 a share.
So where to now for the Woodside share price?
As my Fool colleague Tristan covered just yesterday, brokers at Macquarie Group Ltd (ASX: MQG) reckon there is a little more oil in the barrel for Woodside shareholders.
Macquarie currently rates Woodside shares with a 12-month price target of $27.25. That implies a potential 12-month upside of roughly 9% on today's levels. The broker is optimistic Woodside will be able to pay out healthy dividends going forward and likes the company's current valuation.
At the current Woodside share price, this company has a market capitalisation of $24.34 billion and a dividend yield of 2.25%.
