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

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »