Why did the Woodside (ASX:WPL) share price go backward in November?

What went wrong for Woodside shares last month? We take a closer look

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As we’ve discussed many times, the S&P/ASX 200 Index (ASX: XJO) didn’t have the best of months in November. The ASX 200 ended up losing around 0.91% over the month, going from 7,323.7 points to 7,256. But how did the Woodside Petroleum Limited (ASX: WPL) share price fare?

Well, it’s safe to say it wasn’t a happy month for the ASX 200’s largest oil company either.

The Woodside share price was $23.26 at market close on 29 October. Fast forward a month and this energy company finished November at $21.43 a share. That’s a decline of 7.87%.

Woodside share price anything but black gold in November

So why did Woodside end up having such a bad time of it last month, underperforming the broader market so dramatically?

Well, we had a number of developments out of the company that might have lent a hand to this poor performance.

Firstly, we got an update on Woodside’s upcoming merger of sorts with BHP Group Ltd (ASX: BHP). As announced a few months ago, BHP is in the process of offloading its oil/energy assets to Woodside. This will involve Woodside acquiring the ownership of BHP’s petroleum portfolio in exchange for new Woodside shares.

On 22 November, both companies announced they had have signed a binding share sale agreement for the sale. This did little to inspire the Woodside share price at the time.

Omicron and an oil flood…

Secondly, US President Joe Biden announced a release of 50 million barrels of crude oil from the United States Strategic Petroleum Reserve during the month just gone.

This was in response to the price increases we had seen in crude oil over September and October. It was intended to add additional supply to the global oil market. Under the laws of supply and demand, more supply usually results in lower prices. This is, of course, bad news for oil companies like Woodside — even if it might result in cheaper petrol at the bowser. 

Not too long after, we also saw a crash in the global oil price that seemed to be sparked by the emergence of the Omicron COVID-19 variant. As my Fool colleague James covered at the time, oil had its “worst day of the year so far” on 28 November, with WTI crude oil price sinking by 13.05% to US$68.15 a barrel that day.

So as you can see, none of these factors did the Woodside share price any good. This ASX energy share’s poor November can likely be blamed on a combination of these factors.

It’s not all bad news for Woodside shareholders though. Over the past 5 trading days, Woodside shares have added a healthy 2.22%, including the 0.46% rise so far today to $21.62 a share.

At this share price, Woodside has a market capitalisation of $20.96 billion, with a dividend yield of 2.61%.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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