The Woodside Energy Group Ltd (ASX: WDS) share price has been on a great run in 2022, gaining almost 80%. This compares to the S&P/ASX 200 Index (ASX: XJO), which has fallen by more than 5% over the year to date.
Woodside has benefitted enormously from the higher energy prices that followed Russia's invasion of Ukraine.
But, ASX oil shares don't typically just keep growing and growing indefinitely. There are normally cyclical factors at play (including supply and demand), that impact oil and gas prices. This can then, in turn, weigh on the share prices of ASX 200 energy companies like Woodside.
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Could the Woodside share price be reaching the peak?
No-one can know exactly what share prices will do next week or next month. However, investors can certainly speculate as to how much more growth a business may have in it, particularly when it is so dependent on commodity prices. At some point, its valuation may get too steep for investors to want to buy any more shares.
Tim Haselum from Catapult Wealth today had a warning for investors that may be considering Woodside shares. On The Bull, he called the current Woodside share price a sell, commenting:
The energy giant delivered record production and revenue in the third quarter ending September 30, 2022. But our concerns are possibly slowing economies in Europe and the US and potentially softer crude oil prices. The stock has risen from $22.77 on January 5 to trade at $38.15 on November 10. We believe the stock may be nearing a peak. Investors may want to consider taking some profits.
Third quarter update
Woodside's Q3 update reflected the first full three months including contributions from the former BHP Group Ltd (ASX: BHP) petroleum business.
Production was 51.2 million barrels of oil equivalent (MMboe), up 52% from the second quarter of 2022.
Sales volume was 57.1 MMboe, up 59% from the second quarter of 2022.
Revenue for the quarter was US$5.86 billion, up 70% from the second quarter of 2022.
The company achieved a portfolio average realised price of $102 per barrel of oil equivalent. Woodside sold 24% of produced LNG at prices linked to gas hub indices. The resource price is likely to continue to have a major impact on the Woodside share price.
The business upgraded its 2022 full-year 2022 production guidance to 153 MMboe to 157 MMboe.
Woodside also told investors that it has commenced fabrication of subsea flowlines for the Scarborough and Pluto Train 2 projects in Western Australia, which combined are now 21% complete.
It has also commenced the subsea installation campaign for the Sangomer field development offshore Senegal, which is now 70% complete.
Woodside share price snapshot
Over the past month, Woodside shares have risen by around 15%. And whilst some brokers may believe Woodside has reached its peak, many investors obviously disagree, sending the oil giant's shares around 2% higher in early afternoon trade on Monday.
