The Woodside Petroleum Limited (ASX: WPL) share price is staging a rebound of late, following its 12% fall in mid-August.
At the end of last week, the energy producer's shares finished at $21.11 apiece.
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Why are Woodside shares pushing higher recently?
It's no secret that the spot price of oil has surged lately which has sent the Woodside share price higher. In fact, its shares have climbed 10% in the past five trading days.
On 14 September alone, the company's share price soared 6.23% following OPEC's monthly oil market report.
The "cartel" highlighted a positive outlook for the global economy, providing a detailed analysis of key developments impacting oil market trends.
OPEC noted that global economic growth forecasts for 2021 and 2022 remain unchanged from last month at 5.6% and 4.2%, respectively. However, it acknowledged that recovery efforts continue to be challenged by uncertainties. This includes the spread of COVID-19 variants and the pace of vaccine rollouts worldwide.
There are over 160 different types of oil traded on the global market. Two primary types of crude oil serve as a global benchmark for oil prices, West Texas Intermediate (WTI) and Brent crude.
The type of crude oil generally depends on the geographical location of the oil field and the characteristics of the oil itself.
Currently, the WTI is hovering around the $72 mark, approximately 3% higher after OPEC's update.
In July, the WTI had been trading above $75, which led Woodside shares to roar past $24. If this feat can be achieved again for WTI, it represents a significant upswing for Woodside shares.
What's next?
For the remainder of 2021, OPEC stated that global oil demand is estimated to average 96.7mb/d (million barrels per day).
In 2022, oil demand is expected to increase by roughly 4.2 mb/d, about 0.9 mb/d higher compared to last month's report. This is being underpinned by both the OECD and non-OECD countries. The revival in various fuel prices is expected to be stronger than anticipated and coupled with a steady economic outlook.
Overall, oil demand in 2022 is projected to reach 100.8 mb/d, exceeding pre-pandemic levels.
If the short-term projections are achieved, it could have a strong effect on Woodside shares in 2021.
About the Woodside share price
Despite last week's surge, the company's shares are down 7% year-to-date. But when factoring in the past 12 months, Woodside shares are up 15%.
The company commands a market capitalisation of more than $20.3 billion and has almost 964 million shares on issue.
