The Woodside Energy Group Ltd (ASX: WDS) share price is up 4.9% in early afternoon trade on Tuesday.
Shares are currently trading for $33.01 apiece.
That's a sharp turnaround from Monday when the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed down 3.4%.
So, why is the Woodside share price having such a volatile start to the week?
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Why all the volatility?
Monday wasn't just a big down day for the Woodside share price. Most ASX 200 energy shares ended the day deep in the red.
Investors were hitting the sell button amid news that the Labor government had reached a deal with the Greens on the carbon reduction plan.
The deal doesn't ban new oil and gas projects, as proposed by the Greens. But it was reported that the big energy companies will need to spend billions of dollars more on offsets and carbon capture technology on new projects to meet the new emissions reduction goals.
Commenting on the development that looks to have thrown up headwinds for the Woodside share price yesterday, Samantha McCulloch, CEO of gas lobby APPEA said (quoted by The Australian Financial Review):
New gas supply investment needs policy and regulatory certainty but instead, the Labor-Greens deal creates additional barriers to investment, further diminishing the investment environment and adding to the growing list of regulatory challenges facing the sector.
Which brings us full circle to the surging Woodside share price today.
Investors are snapping up shares after an increase in the oil price.
Brent crude oil leapt 4.2% overnight to US$78.12 per barrel. Brent is currently trading for US$77.87 per barrel.
The oil price is rebounding as investor fears over the banking crisis gripping the United States and Europe are receding.
"Crude is experiencing a nice bounce today as a sense of calm in financial markets has stemmed the bleeding of liquidations across the crude complex," Rebecca Babin, a senior energy trader at CIBC Private Wealth said (quoted by Bloomberg).
Oil also got a boost from reports that ructions between Iraqi Kurdistan and Turkey have cut some 400,000 barrels a day of crude exports after a pipeline was shut down by a court order.
Woodside share price snapshot
As you can see on the chart below, the Woodside share price remains down 7% in 2023 as energy prices retrace from last year's highs.
