What? Woodside Petroleum Limited (ASX: WPL) shares fell a further 3% on Thursday morning to hit $34.10, within touching distance of the recent low of $33.23 from early February.
What Happened? In what is becoming a familiar story for investors in Australia's oil and gas majors, Woodside's share price fell in response to a 6.6% fall in the benchmark crude oil price overnight. A report from the U.S. Energy Information Administration showed that US crude stockpiles soared to a new record last week, posting their biggest increase in 14 years in the process.
The huge build-up in reserves provided further data to traders that the current production rate far exceeds global demand.
What Now? The oil glut is obviously bad news for oil and gas companies like Woodside, Santos Ltd (ASX: STO) and Oil Search Limited (ASX: OSH), but is great news for consumers and new car salespeople that are seeing better demand for high-margin large-engine cars.
Households are also benefiting from stable grocery prices and subdued inflation, boosting purchasing power, which may help retailers like Kathmandu Holdings Ltd (ASX: KMD) coming into Winter. This may also help travel agents such as Flight Centre Travel Group Ltd (ASX: FLT) if consumers opt to use some of their free cashflow.
