Why is the Woodside share price racing ahead of the benchmark today?

Woodside shares look to be catching tailwinds from two fronts today.

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The Woodside Energy Group Ltd (ASX: WDS) share price is in the green.

Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed on Friday trading for $27.21. In earlier trade, shares were swapping hands for $27.49 apiece, up 1.0%.

At the time of writing, the ASX 200 energy stock has given back some of those gains and is trading for $27.23 a share, up 0.1%.

That still sees the Woodside share price racing ahead of the ASX 200 today, with the benchmark index down 1.3% at this same time.

Here's what's happening.

What's supporting the Woodside share price today?

The Woodside share price looks to be catching tailwinds from two fronts today.

First, a rising oil price.

Global oil prices saw a sizeable uptick over the long King's Birthday weekend. On Friday, Brent crude oil was trading for $US79.62 per barrel. Today that same barrel is trading for US$81.88, up 2.8%.

Oil prices have been under pressure recently following the decision by the Organization of Petroleum Exporting Countries and their allies (OPEC+) to begin unwinding their production cuts in the fourth quarter of 2024.

Noting the three-week slide in oil prices, Fawad Razaqzada, a market analyst at City Index said (quoted by Bloomberg), "At the start of this week, traders have decided to buy the dip. With the US driving season underway, demand is likely to recover, keeping the downside limited for now."

Also likely helping the Woodside share price outperform today is the company's announcement it has achieved its first oil from the Sangomar field, located 100 kilometres offshore of Senegal. Woodside highlighted that this marks the safe delivery of Senegal's first offshore oil project.

The deepwater Sangomar Field Development Phase 1 project includes a stand-alone floating production storage and offloading (FPSO) facility. The nameplate capacity stands at 100,000 barrels per day. The project includes subsea infrastructure designed to allow further development phases.

"This is a historic day for Senegal and for Woodside," Woodside CEO Meg O'Neill said.

O'Neill continued:

First oil from the Sangomar field is a key milestone and reflects delivery against our strategy. The Sangomar project is expected to generate shareholder value within the terms of the production sharing contract.

Delivering Senegal's first offshore oil project safely, through a period of unprecedented global challenge, demonstrates Woodside's world-class project execution capability. We are proud of the relationships we have formed with PETROSEN, the government of Senegal and our key international and local contractors to develop this nationally significant resource.

Commenting on the first oil milestone that could help support the Woodside share price longer-term, Thierno Ly, general manager of PETROSEN said:

First oil from the Sangomar field marks a new era not only for our country's industry and economy, but most importantly for our people…

We have never been so well positioned for opportunities for growth, innovation, and success in the economic and social development of our nation.

Woodside said the project's cost estimate remains within the provided range of US$4.9 billion to US$5.2 billion.

The drilling campaign is ongoing, and Woodside said it expects to continue commissioning activities and ramping up production through 2024.

The Woodside share price is down 20% over the past 12 months.

Motley Fool contributor Bernd Struben 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.

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