How did the Woodside Petroleum (ASX:WPL) share price perform in October?

We check the month that was for the ASX's largest pure-play oil company.

| More on:
A Santos oil and gas worker wearing a hard hat stands in a yellow field looking at blueprints with an oil rig and blue sky in the background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

October was a volatile month for the S&P/ASX 200 Index (ASX: XJO). Despite a few peaks and troughs, the ASX 200 ended up recording an anaemic loss of 0.1% for the month that was. But let's take a closer look at one ASX 200 share which had a far more interesting time of it. That would be the Woodside Petroleum Ltd (ASX: WPL) share price.

Woodside is a major player in the ASX 200 Index and is also the largest pure-play oil company on the share market. So how did it do over October? Well, Woodside shares started the month at $23.88 a share. Last Friday, Woodside closed at a price of $23.35. That means that, on paper, Woodside shares recorded a loss of 2.22% for the month.

But that doesn't really tell us all that happened with this company over the month. Even though the two prices bookended Woodside's October, the company got as low as $23.26 a share and as high as $25.46 during the period. That's a difference of around 10%.

Oil prices and a rising dollar hit Woodside shares

Of course, both this volatility and Woodside's rather poor performance for the month can be blamed on one thing: the crude oil price. Energy companies like Woodside ride or die on the price of crude oil. Since Woodside's costs are relatively fixed, changes in the oil price can make all the difference to this company's profitability.

According to Markets Insider, crude oil had a relatively strong month over October. West Texas Intermediate (WTI) crude rose from around US$75 a barrel at the start of the month to more than US$83 by the end. It even spiked as high as US$85 a barrel towards the end of the month before settling down again.

So why didn't Woodside's share price react accordingly to the price of oil rising?

Well, it's possible that a rising Australian dollar helped blunt this tailwind. While oil rose over the month, so did the Aussie dollar against the US dollar. At the start of October, one Aussie dollar was buying around 72 US cents. This had risen to roughly 75 US cents by the end of the month, a rise worth around 4%.

A higher Aussie dollar means it's theoretically more expensive for Woodside to turn the US dollars it receives for its oil into Australian dollars, handicapping the boost it would be getting from the higher oil prices.

At the current Woodside share price of $23.38 at market close on Tuesday, this ASX 200 energy share has a market capitalisation of $22.7 billion, with a dividend yield of 2.41%.

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

More on Energy Shares

Coal miner standing in a coal mine.
Energy Shares

Up 62% since April, what's happening with Whitehaven shares today?

Whitehaven shares have enjoyed a strong rally since April despite weak coal prices.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Energy Shares

Why Macquarie sees Paladin Energy shares as a buy in the dip opportunity

This uranium stock could be a buy according to the broker.

Read more »

Happy man working on his laptop.
Energy Shares

Opportunity knocks: 2 ASX stocks ready to surge

Analysts expect big things from these shares.

Read more »

Two businesspeople walk in opposite directions on a staircase with arrows under their arms, one pointing up and one pointing down.
Energy Shares

3 largest ASX uranium shares move in different directions amid fresh developments

Here's what is happening with Paladin Energy, Deep Yellow, and Boss Energy shares on Thursday.

Read more »

Bored man sitting at his desk with his laptop.
Energy Shares

Guess which ASX 200 share is sinking 6% on shock CEO exit

Investors are reacting negatively to this surprise news.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Energy Shares

Should you buy Paladin Energy shares after the selloff?

Let's see what Bell Potter is saying about the uranium stock.

Read more »

A smiling woman puts fuel into her car at a petrol pump.
Energy Shares

Guess which ASX 200 energy stock is leaping higher on earnings growth

Investors are sending the ASX 200 energy stock sharply higher on Wednesday.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Energy Shares

Up 93% since April, why is this ASX 200 uranium stock crashing today?

The resurgent ASX 200 uranium stock is falling hard today. But why?

Read more »