Well, believe it or not, we are now in June. Along with moons and Ferris wheels, many investors might be wondering what this June might hold in store for the ASX, especially given yesterday’s monster interest rate hike. And one of the ASX shares investors will no doubt be watching is the Woodside Energy Group Ltd (ASX: WDS) share price.
Woodside Energy (formerly known as Woodside Petroleum) is now the ASX’s largest energy share by a mile, thanks to the recent deal with BHP Group Ltd (ASX: BHP). And what a time to have additional oil resources fall into your books. Oil prices remain at historically elevated levels, which were kick-started by the war in Ukraine earlier this year.
As it currently sits, crude oil remains well above US$100 a barrel, with Brent crude hitting close to US$122 a barrel earlier this week.
So if an investor wants to predict where the Woodside share price will go this June, that is certainly the first port of call. As an energy company, Woodside’s fortunes largely ride or die on the price of the ‘black gold’ it extracts.
That’s almost certainly a large part of the equation that explains Woodside’s share appreciation over 2022 thus far. It’s no coincidence that while oil has skyrocketed in price over the year to date, the Woodside share price has rocketed by more than 45%.
What’s next for the Woodside share price?
We can’t be sure where the Woodside share price will go over June. But chances are it will follow the movements of the crude oil price fairly closely.
Beyond June, many expert investors are bullish. Earlier this week, my Fool colleague Bernd covered the views of Philipp Hofflin, portfolio manager at Lazard Asset Management. Mr Hofflin said the following on Woodside’s business at the moment:
The astonishing thing about Woodside is that you can buy it today at 20% less than it was pre-COVID. Yet it has done a deal with BHP Petroleum, that is currently delivering phenomenal earnings… The cash flow is enormous.
They have a fortress balance sheet because they did this deal entirely with equity. Woodside, which has a sort of breakeven cost of production of just a bit over $10 a barrel, in a world where the oil price is $110, it’s a pretty safe value opportunity.
So that’s a pretty unequivocal opinion on Woodside shares today. This ASX 200 energy share will certainly be worth watching this June… along with the moons and Ferris wheels.