Shares in Woodside Petroleum Limited (ASX: WPL) have struck a green chord in 2022 and are now up 49% this year to date.
Whilst energy and commodity markets continue to boom, ASX resources shares are front and centre with names like Woodside leading the pack.
It is now up 40% in the last 12 months and has locked in a 2% gain this past week.
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What's the Woodside share price in for in Q3?
According to analysts, it's all about the price of oil and gas for Woodside over the coming weeks and months.
Brent Crude oil now trades above US$108 per barrel after whipsawing between US$96–$117 over the past few weeks.
Natural gas has been on a different trajectory in that time – up, with all gas and no brakes (pun intended).
"[A]s traders weighed in the outlook for global energy demand…oil prices have also been supported by protest-driven supply disruptions in Libya and the potential for an EU ban on Russian oil," according to analysis from Trading Economics.
"A full and immediate ban could displace more than 4 million barrels a day and propel Brent prices to a record $185," according to a forecast from JPMorgan cited by Trading Economics.
It now rests at US$7.19 MMBtu after stepping down from 52-week highs in recent days.
In a separate note from late last week, JP Morgan upped its forecasts on forward oil and electricity prices, based on the market's pricing of each in the forward markets.
"We have increased our Brent price forecast based on the current forward curve," the broker wrote to clients. Continuing on the same lines, it added:
We now estimate average Brent prices of US$101/bbl in CY2022 (+30%), US$90/bbl in CY2023 (+20%) and US$90/bbl in CY2024 (+27). Similarly, we have marked-to-market our electricity price forecasts to US$108/bbl in CY2022 (+15%), US$93/bbl in CY2023 (+11%) and US$80/bbl in CY2024 (+9%).
While we believe energy commodity prices are unsustainably high and will likely prompt a supply response, the factors driving tight markets are challenging to immediately address.
We believe this will likely result in prices remaining above our long-run forecasts for some time.
Analysts Henik Fung and Joyce Ho of Bloomberg Intelligence reckon these upward revisions to oil and gas markets should inflect positively on Woodside's share price.
"Woodside Petroleum's financial performance could get a boost from elevated LNG prices amid Asia's rising gas demand and its reliance on Australia as a supplier," the pair said in a recent note.
"Woodside's merger with BHP's petroleum business may further spur revenue and profit growth on volume gains once the deal is final before June 2022," they added.
Both Fung and Ho also agree that Woodside's decision to sell its stake in the Pluto Train 2 asset "may yield sufficient liquidity to power other growth projects".
Woodside is rated as a buy from two-thirds of analysts covering it according to Bloomberg data, whilst around 27% say it's a hold right now.
Each of Jarden, Barrenjoey, Bernstein, Credit Suisse and Morgans have it as a buy, whilst the consensus price target is $32.88 per share.
