Woodside and ASX 200 Energy Shares Experience Decline Amid Oil Price Crash

In a challenging session for ASX 200 energy shares, Woodside Energy Group Ltd (ASX: WDS) shares concluded the week with a disappointing 3% drop to AU$31.17. The downward trend was not exclusive to Woodside, as fellow ASX 200 energy shares, including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO), also witnessed declines exceeding 1% during Friday's session.

Woodside Shares Under Pressure

Investors reacted to the decline in ASX 200 energy shares following an overnight crash in oil prices. The West Texas Intermediate (WTI) crude oil price saw a 4.9% decrease, settling at AU$72.90 per barrel, while the Brent crude oil price dropped by 4.6%, settling at AU$77.42 per barrel. Both benchmarks reached their lowest levels since early July.

Factors Driving Oil Price Tumble

The primary factors contributing to the weakness in oil prices include concerns regarding supply growth and the demand outlook. Energy Information Agency data revealed a 3.6 million barrel increase in U.S. crude inventories last week, coupled with a record production of 13.2 million barrels per day. A simultaneous 0.6% decline in U.S. industrial production raised concerns about an oversupply surpassing demand.

News of a 2.8% slowdown in Chinese crude refining throughput in October further pressured oil prices. Jim Burkhard from S&P Global Commodity Insights noted that China's reduced demand coincides with the U.S. breaking records in oil production, creating a challenging market dynamic.

OPEC's Perspective

Despite the downward trend, the Organization of the Petroleum Exporting Countries (OPEC) remains optimistic about a rebound. OPEC attributes the recent price decline to financial market speculators, expecting a shift in the near future. The organization is set to meet on November 26 to discuss and decide on future production plans.

As energy markets navigate these uncertainties, Woodside and its counterparts are closely monitoring OPEC's decisions and broader market dynamics to gauge potential recovery in the energy sector.

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