The Woodside Energy Group Ltd (ASX: WDS) share price bounced back today after losing nearly 5% in yesterday's trade.
The oil and gas giant's shares gained 3.26% today to close at $31.36 each. For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) also gained 2.8% today.
Let's take a look at what is going on at Woodside.
Oil prices recover
Global oil prices are higher due to concerns of tight supply amid the Russian invasion of Ukraine. US West Texas Intermediate (WTI) crude oil is up 1.33% to US$111.65 per barrel, Trading Economics data shows. Meanwhile, Brent crude oil prices are up 0.98% to US$115.23 a barrel.
PVM analyst Stephen Brennock predicted oil supplies will remain tight. He said (as quoted by Reuters):
Supplies will remain tight and continue supporting high oil prices. The norm for ICE Brent is still around the $120 mark.
Meantime, Houston oil consultant Andrew Lipow told the publication there are "two competing narratives" when it comes to oil prices. He said:
One is sanctions on Russian supplies. On the other hand, we see the high prices resulting in some demand destruction.
Woodside was not the only oil and gas producer to surge ahead today. Beach Energy Ltd (ASX: BPT) shares closed up 4.52% while Santos Ltd (ASX: STO) finished the day 1.23% higher.
Broker outlook
The broker Morgans has increased its holdings in Woodside recently, highlighting the company trades at a "significant discount" to US peers.
Explaining why it has boosted holdings in Woodside, Morgans analysts said:
This was a conscious decision to lift our energy sector exposure, partially as a hedge against the inflationary forces affecting other parts of the portfolio, and because WDS looks abnormally cheap post de-merger.
Recently, analysts at JP Morgan have predicted upside for the Woodside share price. The broker has placed a $37 price target on the company's shares. That's 18% more than its current share price.
Woodside share price snapshot
The Woodside share price has gained 37% in the past year while it has soared 42% year to date.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost nearly 10% over the past year.
Woodside has a market capitalisation of about nearly $60 billion based on today's share price.
