Why did the Woodside share price hit a 2-year high on Thursday?

We take a look at what drove this ASX oil and gas share higher today.

| More on:
Two workers at an oil rig discuss operations.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Woodside Energy Group Ltd (ASX: WDS) share price enjoyed another day in the green on Thursday.

At market close, Woodside shares were up 1.98% at $35.51 apiece. However, soon after market open, they reached $36.20 — a two-year high. In fact, in the last couple of years, the ASX oil share has risen by 75%.

Let's take a look at what might be pushing the Woodside share price higher.

What happened today?

According to Bloomberg, China's State Council outlined a 19-point policy stimulus package of 1 trillion yuan, or $210 billion.

This funding is focused on infrastructure spending as a way to drive economic growth following the dampening impact of COVID lockdowns and a property market downturn.

This presents a favourable tailwind for Woodside as greater infrastructure spending means more demand for steel and metals.

Woodside would be pleased to hear some positive news after the US and China reported weaker than expected economic data last week. China cut interest rates upon poor data on industrial output and retail sales, missing most analyst estimates as reported by Reuters.

Additionally, the price of Woodside's key commodity rose for a third straight session on Thursday, Trading Economics reports. West Texas Intermediate (WTI) crude oil futures rose above $95 per barrel, while Brent crude oil futures soared to $102 per barrel — the highest prices in three weeks.

Perhaps not coincidentally, the Woodside share price also rose for a third straight session today.

A quick recap of Woodside's most recent results

Last month, Woodside released its results for the three months ending 30 June, as my colleague Bernd Struben reported.

Q2 2022 saw the oil producer achieve revenue of $3.44 billion, up 44% from Q1 2022 and 159% from Q1 2021. Woodside also produced 33.8 million barrels of oil equivalent (MMboe), a 60% increase from the prior quarter and up 49% from Q2 2021.

Additionally, the company reported sales volume of 35.8 MMboe, up 51% from Q1 2022 and up 27% on Q1 2021.

These results were spearheaded by Woodside's merger with the petroleum business of BHP Group Ltd (ASX: BHP). This big event catapulted Woodside into a top 10 global independent energy producer by hydrocarbon production.

Woodside share price snapshot

The Woodside share price has jumped 75% in the past year, 57% year to date, and 12% in the past month.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 6% in the past 12 months and 7% so far this year, but is up by almost 4% in the last month.

Woodside has a market capitalisation of around $66.1 billion.

The company is currently trading at a price-to-earnings multiple of 11.94x. On a historical basis, this is on the lower end, so it could be that the poor economic outlook and macroeconomic activity are instilling pessimism in the market.

Motley Fool contributor Raymond Jang 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 Scott Phillips.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »