WDS has rallied since September while crude oil has fallen to test its 2022 lows, ignoring the usual strong correlation in the process. Investors are clearly expecting crude oil to recover from its current foray below $US80/barrel which again by definition lowers the attractiveness of today’s risk/reward profile.
- We believe WDS will struggle to break $40 unless crude oil can rally back above $US90/barrel – for now, we are happy to have reduced our exposure from 5% to 3%.
MM is long and still bullish WDS – for now
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Woodside Energy (WDS) v Crude Oil ($US/barrel)
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Woodside Energy (WDS) v Crude Oil ($US/barrel)
