The Woodside Energy Group Ltd (ASX: WDS) share price went backwards again in October.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock finished September trading for $25.20 a share. When the closing bell sounded on 31 October, shares were swapping hands for $23.78 apiece, down 5.6% for the month.
For some context, the ASX 200 fell 1.3% in October.
Here's what happened over the month just past.
What impacted the Woodside share price in October?
As you might expect, much of the pressure on the Woodside share price looks to have come from a sliding oil price.
On 7 October, Brent crude oil was trading for US$80.93 per barrel as traders braced for a potential escalation in the ongoing conflict in the Middle East.
But with the concerns of an all-out war between Iran and Israel disrupting global energy supplies abating, rightly or wrongly, Brent crude oil ended October trading for US$73.16 per barrel.
On 16 October, the ASX 200 energy stock also released its quarterly update, which saw the Woodside share price edge 0.6% higher on the day.
Among the highlights, Woodside achieved record quarterly production of 53.1 million barrels of oil equivalent (MMboe), up 20% from the prior quarter.
"The strong operational performance was underpinned by the accelerated ramp-up of Sangomar and exceptional performance at Pluto LNG and NWS, which recorded 99.9% and 99.2% reliability respectively," Woodside CEO Meg O'Neill said.
Along with the increased production, Woodside's quarterly revenue was up 21% quarter on quarter to US$3.68 billion.
What's next for the ASX 200 oil and gas producer?
With the company's production lifting, one of the biggest impacts on the Woodside share price in the year ahead will be the price it receives for the oil and gas it pumps from the earth.
On this front, Brent crude oil is currently trading for US$74.16 per barrel. That's up 1.5% following news that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will again delay their plans to gradually increase their voluntary 2.2 million barrel per day production cuts by 180,000 barrels per day on a monthly basis.
OPEC+ had initially intended to begin increasing production in November. That was pushed to December. However, over the weekend the cartel said production caps would not be lifted yet in December.
"Market conditions won out. OPEC+ showed it couldn't ignore the current macroeconomic economic realities centred on China and Europe, which point to weaker oil demand growth," Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd said (quoted by Bloomberg).
The market conditions he refers to, which could continue to pressure the Woodside share price, include weak demand from China as the government continues to struggle to rekindle the nation's economic growth engine. And this comes amid record oil production out of the United States, which reached a whopping 13.4 million barrels per day in August.
This sees a number of analysts, including Citigroup and JPMorgan Chase & Co, forecasting that the oil price will drop into the US$60 range in 2025.
The wild card for the Woodside share price
The wild card for global oil prices, and by connection the Woodside share price, remains what happens in the Middle East.
While we fervently hope for a rapid de-escalation, the latest pronouncements from Iran's Ayatollah Ali Khamenei over the weekend did not point in that direction.
Following on Israel's recent aerial assault on Iran's air defence and military targets, Khamenei said that Iran would respond to Israel and the US with "a crushing response".
Should that response garner an equally crushing response from Israel and the US, we could see a significant disruption to global oil supplies.
Commenting on the market's response to the conflict over the past year, Bloomberg Economics' chief economist Tom Orlik said:
It's remarkable that the price of a barrel of oil is lower today than it was on October 6, 2023, despite the fact that Israel is in direct conflict with Hamas in Gaza and with Hezbollah in southern Lebanon, and that Israel and Iran are exchanging rocket fire.
Orlik said markets may have "absorbed all the information available and concluded that none of this poses a direct risk to oil supply".
He added that's it's also "possible the market sees the risk of escalation hitting the global oil supply but finds it hard to put a price on low-probability, high-impact scenarios".
The Woodside share price is down 29% in 12 months.
