The Woodside Energy Group Ltd (ASX: WDS) share price is in the red in early trading today, but it's outperforming the S&P/ASX 200 Index (ASX: XJO).
Despite the ASX suffering a meltdown this morning, the Woodside share price along with the energy sector is faring better than the broader ASX 200 index. The Woodside share price is down 1.89% while the energy sector has fallen 2.04%, compared to the current 2.61% downturn across the ASX 200.
This halts Woodside's strong momentum this year after recording sound results for the half-year FY22.
Let's find out what's triggering the fall in Woodside shares today.
Image source: Getty Images
US inflation exceeds initial expectations
The United States consumer price index (CPI) rose 0.1% from July and the Bureau of Labor Statistics' monthly cost of living survey revealed prices were 8.3% higher last month compared to August last year. This was still lower than the increases of 8.5% in July and 9.1% in June.
Despite the slight slowdown in the rise of prices, it was enough to trigger a significant sell-off on Wall Street, which suffered its worst drop since June 2020.
Gas prices continued their downward trend, recording 13 weeks of consistent drops. This helped soften the overall surge in the CPI as petrol prices fell 10.6% in August. However, food costs jumped 11.4% and electricity prices surged 15.8% compared to a year ago.
The continual fall in gas prices does not bode well for the Woodside share price as this will eat into its margins. However, the Organisation of Petroleum Exporting Countries expects demand for oil to top the pre-pandemic level in 2023.
So, Woodside could potentially make up for the price drops with a higher volume of exports.
Woodside share price snapshot
In the last year, the Woodside share price has climbed by 56% but this has slowed in the last six months, increasing by just 2%. In contrast, the ASX 200 has declined 6% across the last year and fallen by 2% in the past six months.
The current market capitalisation of Woodside is around $62.9 billion.
Woodside shares are currently trading at a price-to-earnings (P/E) multiple of around seven times.
