What’s on the cards for the Woodside share price in April?

Here’s what the experts are predicting for the ASX oil and gas company.

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Key points

  • Woodside Petroleum shares have climbed more than 50% year to date
  • Analysts predict commodity market volatility should lock in gains for companies like Woodside
  • Other analysts say investors must also consider LNG prices in the near term

The Woodside Petroleum Ltd (ASX: WPL) share price finished Monday in the green after closing the session at $33.02 apiece, a 1.04% gain.

Woodside shares have spiked more than 5% in the past month of trade and have soared more than 50% this year to date as commodity markets rumble like the V8 engines they build and feed.

Key markets like oil and gas have ensured tidy gains for Woodside shareholders as well, given the company is a price taker where the share price is hypersensitive to fluctuations in commodity sectors.

TradingView Chart

What’s the outlook for April?

All the talk appears to be on the state of oil and LNG segments for Woodside this month, particularly as geopolitical tensions continue to plague global markets.

Brent Crude futures have pushed north over the weekend and Brent spot now trades at US$105 per barrel after gyrating heavily these past few weeks.

Meanwhile, US natural gas futures have extended gains. The commodity now trades around US$5.75 per million British thermal units (MMBtu) and is heading towards single-year highs of US$6.312/MMBtu in November.

Both UK Gas and Dutch Natural Gas contracts have followed a similar trend in the past few months. Their price movements, below, resemble a tracing of the alps instead of a price chart.

TradingView Chart

The volatility in all of these markets is sure to lock in big gains for players like Woodside, analysts say.

After a slump in financial performance during 2020, rising LNG prices and surging demand from Asia could be the welcome boost Woodside is searching for. That’s according to Henik Fung and Joyce Ho of Bloomberg Intelligence.

“Woodside Petroleum’s financial performance could get a boost from elevated LNG prices amid Asia’s rising gas demand and its reliance on Australia as a supplier,” the pair wrote in a recent note.

“Woodside’s merger with BHP’s petroleum business may further spur revenue and profit growth on volume gains once the deal is final before June 2022. Selling down its equity stake in Pluto Train 2 may yield sufficient liquidity to power other growth projects,” they added.

It appears that LNG markets are an important near-term catalyst that investors must consider, analysts are saying.

But this might not be on the cards for long, according to some commentary on the matter. Demand for LNG out of Asia has already started to slow in April, according to Megha Mandavia from The Wall Street Journal.

“As energy buyers in Europe reorganise to wean themselves off Russian gas in the wake of Vladmir Putin’s war on Ukraine – and natural gas prices skyrocket – Asian countries are facing some serious sticker shock,” Mandavia wrote.

“[LNG] demand in Asia has already taken a meaningful hit. In the long run, the consequences could be even more profound – slower Asian LNG demand growth through the remainder of the first half of the decade,” she added.

Reportedly, Asia Pacific LNG imports have tightened by 10% year on year from Q1 CY21 whereas Indian LNG imports have stalled by 25%.

Therefore, Woodside’s outlook in April appears to be hinged on what LNG and oil markets decide this month.

Meanwhile, the consensus price target on Woodside’s share price is $32.86 according to Bloomberg data, with around 67% of analysts advocating to buy the stock right now.

Motley Fool contributor Zach Bristow 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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