Woodside Petroleum Share Price Signalling an Industry-Wide Recovery?

It’s been a tough year for stocks like Woodside Petroleum Ltd [ASX:WPL], with the broader oil and energy sectors remaining depressed from the pandemic-induced market crash.

Oil stocks like WPL, Santos Ltd [ASX:STO] and Oil Search Ltd [ASX:OSH] took a battering from COVID-19 as the pandemic crushed demand.

But with the delivery of a vaccine on the horizon and economic activity ticking back up, there could be a resurgence in oil stocks.

Woodside Petroleum Share Price Chart

Source: TradingView

Over the past 12 months, the WPL share price has lost around 33%.

Recovery on the horizon?

It’s been a choppy year for the price of oil — at one stage producers were paying to have oil taken off their hands.

ASX WPL share price chart

Source: TradingView

With a vaccine promised to be delivered sometime next year and ‘normal’ activities set to return, we could expect the demand for oil to increase too.

In fact, the price of crude oil has skyrocketed this month, shooting up 24%.

Good news for shares like WPL.

In their investor briefing earlier this month, WPL reaffirmed its production guidance of 99 to 101 million barrels of oil despite the constraints imposed by the pandemic.

This guidance is underscored by a record first-half production of 50.1 million barrels to June 30 this year.

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While the world is still largely dependent on oil for its energy needs, WPL continues to highlight its shifted focus towards LNG.

Is oil moving oil stocks?

WPL has set a target of net zero emission by 2050, aiming for reductions of 15% by 2025 and 30% by 2030.

Certainly a bold move for a fossil fuel producer — and an interesting one.

WPL hasn’t been quiet about its ‘early-mover’ activities in hydrogen.

Along with its focus on LNG the company is confident it can provide value through the world’s energy transition.

An ambitious plan in my opinion, but it could also be a very profitable one.

It’s this kind of deep value we are often on the lookout for at The Rum Rebellion. If you want to know what to look out for then check out one of our latest reports. Three deep value stocks currently underpriced: these ASX gems could potentially deliver market-beating returns as the economy recovers. Click here to learn more.

Kind regards,

Lachlann Tierney
For The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

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