The Woodside Energy Group Ltd (ASX: WDS) share price has started October off with a bang.
At Wednesday's market close, Woodside shares have risen by around 7% since the start of the month.
Although the performance over the last five days isn't necessarily going to be repeated over the next five days, or even over the rest of the month.
But, share markets have rebounded strongly after September. The S&P/ASX 200 Index (ASX: XJO) has jumped by 5.3% in October to date — it has seen a lot of the ground lost in September already recovered in less than a week of the new month. This is likely due to investors thinking that interest rates may not go as high as previously feared.
As readers may have noticed, the Woodside share price has outperformed the ASX 200 in October so far.
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What could happen next?
Of course, anything could happen next. Without a crystal ball, it's impossible to know.
June saw a number of ASX shares hit a low point for 2022. But then they started climbing.
We've seen ASX shares (and global shares) go up considerably in the last few days. But some piece of news could send them down again. Or even higher. Or valuations could stay at this level for a while. Who knows?
The combination of inflation and rising interest rates is causing considerable volatility. For quite a lot of the year, it has meant declines for the market, but volatility includes periods of upswings as well. We may already have seen the bottom.
As with all energy companies, one of the key factors that can influence the Woodside share price, profit, cash flow and dividend is what happens with resource prices.
The business benefited after energy prices increased following the Russian invasion of Ukraine. But, in recent weeks and months, the oil price has been drifting lower.
When the resource price goes up, it's good for a commodity business. It costs roughly the same to produce a barrel of oil (equivalent), so higher revenue for the same amount of resource largely adds to profit.
But the same is true in reverse. When the resource price drops, it can largely reduce profit and cash flow.
Which way will the oil price go next? The Russian invasion of Ukraine continues. However, investors may be worrying that there is a greater risk of global recession, which could reduce demand for oil and therefore impact the oil price.
Broker ratings on the Woodside share price
It's hard to say what a share price will do this week or even this month.
However, brokers like to release price targets. This is where the experts believe that the share price will be in 12 months from now.
For example, the broker Morgan Stanley has an overweight (buy) rating on Woodside with a price target of $37. That implies a possible rise of around 10%.
The broker Citi also rates Woodside as a buy, with a price target of $36.50. That implies a possible rise of close to 10%. It likes Woodside for its exposure to LNG and that it may benefit amid the European energy crisis.
Woodside share price snapshot
Over the past six months, the Woodside share price virtually hasn't moved.
