Fears of a deep recession in Europe are easing, leaving the vitality market “finely balanced” for 2023 as China additionally reopens its financial system, the top of Australia’s largest oil and gasoline group mentioned.
Meg O’Neill, chief govt of Woodside, mentioned the outlook for the sector would rely upon the energy of restoration in Europe and Chinese language demand for gasoline after Beijing dismantled the zero-Covid curbs that hampered its financial system.
Australian corporations together with BHP, Rio Tinto and Woodside are seen pretty much as good indicators for world demand given the importance of the nation’s mining and vitality exports to markets together with China and Japan.
“The market is finely balanced,” O’Neill informed the Monetary Occasions. “There’s nonetheless loads of unanswered questions,” she mentioned of European and Chinese language demand filtering into vitality markets this yr.
Woodside on Monday reported a trebling of annual revenue after it accomplished the combination of BHP’s oil and gas belongings. Russia’s invasion of Ukraine additionally despatched gasoline costs hovering, resulting in file earnings for the worldwide business.
Income on the firm reached virtually $17bn for the yr, up from $7bn in 2021, whereas revenue after tax grew to $6.6bn from $2bn. The corporate paid out a file $4.8bn in dividends for the yr.
The outcomes from Australia’s largest impartial oil and gasoline producer replicate a bumper year for the industry after Russia’s invasion of Ukraine sparked a rush to cease utilizing Russian vitality and disrupted markets.
Gasoline costs in Europe have fallen to 18-month lows as fears of a scarcity in the course of the winter have eased.
Daniel Hynes, a commodities analyst with financial institution ANZ, mentioned he anticipated China’s demand to begin rising within the second quarter as industrial exercise picked up, whereas in Europe decrease gasoline costs may sluggish the discount in consumption required to offset the autumn in Russian provide.
“The spectre of a gasoline shortfall lingers on,” he mentioned in a be aware forecasting that gasoline costs would pattern greater within the second half of the yr.
Woodside, which is certainly one of Australia’s largest oil and gasoline producers alongside Shell of the UK and ExxonMobil of the US, mentioned it continued to seek the advice of with the Australian authorities over its intervention in the country’s energy sector.
O’Neill mentioned it was “very laborious to say” whether or not she was assured that the business and authorities would attain a passable settlement on plans to shore up the nation’s home gasoline provide with out damaging its export popularity.
“We need to proceed to be a constructive participant,” she mentioned, highlighting the A$2.7bn ($1.8bn) that the corporate paid in tax and royalties in Australia final yr.
Woodside shares edged 1 per cent greater to A$32.92 on Monday.
