The Woodside Energy Group Ltd (ASX: WDS) share price has charged higher in the last year, but is it still worth buying in 2023? Woodside shares have soared 44% in the last year.
In today's trade, Woodside shares are falling 1.08% to $36.60 after the oil price fell overnight.
So what is the outlook for the Woodside share price in 2023?
What's ahead?
Woodside is a global oil and gas producer. The price of oil and gas tends to weigh heavily on Woodside shares, given it can impact the company's earnings.
A positive report out of UBS in January may signal good news for the oil price. The UBS chief investment office is tipping crude oil prices to rise in 2023. In fact, UBS believes oil to outperform coal in 2023:
Analysts said:
The energy problems of 2022—redirected Russian supply, chronic underinvestment in upstream capacity— are here to stay. And with demand recovering in China as well as in emerging markets overall, energy prices should continue to climb in 2023.
But unlike last year, when thermal coal replaced natural gas and crude oil as best performer, the UBS Chief Investment Office (CIO) expects oil to come out on top in 2023.
UBS is predicting brent crude oil to reach US$110 a barrel in 2023, and WTI oil to lift to US$107 a barrel.
Looking at the gas price, UBS is predicting natural gas to hit US$4.5 per MMBtu by mid-2023 and US$5 MMBtu by the year's end. UBS said:
Overall, we expect natural gas demand (including net exports) to rise by about 1 billion cubic feet per day in 2023.
Natural gas is currently down 1.03% and fetching US$3.28 per MMBtu, Bloomberg Energy data shows. Meanwhile, the crude oil price is sliding 0.84% to US$84.27 a barrel, while WTI crude oil is priced at US$78.67 a barrel.
What else?
UBS is not the only analyst forecasting the oil price to rise. Goldman Sachs global head of commodities research Jeff Currie recently tipped oil to hit US$90 a barrel this quarter before lifting to US$95 a barrel in the June quarter amid China's reopening.
Meanwhile, Citi analysts are tipping Woodside dividends to jump in FY23 and FY24. As my Foolish colleague James reported, the broker is predicting Woodside to pay a fully franked dividend of $3.47 per share in FY23 and $3.38 a share in FY24.
Citi has placed a $38.50 price target on Woodside shares and recommends it as a buy.
Woodside share price snapshot
The Woodside share price has climbed 3% year to date. In the last month, Woodside shares have climbed 3%.
Woodside has a market capitalisation of about $69 billion based on the current share price.
