The share price of Woodside (OTC: WOPEY ) Energy Group Ltd (ASX: WDS) fell by 1.36% to A$37.74 on Tuesday, underperforming the S&P/ASX 200 Index (ASX: XJO), which edged up 0.05%. The dip in Woodside's shares came despite the company's announcement of a non-binding memorandum of understanding with three Japanese companies to study a potential carbon capture and storage (CCS) value chain between Japan and Australia.
The Japanese corporations involved in the agreement are Sumitomo Corporation, Toho Gas Co Ltd., and Kawasaki Kisen Kaisha. As part of the study, the four companies will examine the capture, storage, and transportation of carbon dioxide emissions in Japan's Chubu region. Woodside will also investigate the injection and storage of carbon dioxide at Australian storage sites.
Shaun Gregory, Woodside's executive vice president, sees CCS as an opportunity for industry decarbonization through coordination and collaboration between jurisdictions, governments, and industries. He noted that countries like Japan, which face challenges in reducing emissions, will likely seek support from neighboring nations.
However, the primary driver behind Woodside's share price decline on Tuesday appears to be a drop in global oil prices. West Texas Intermediate (WTI) crude oil price moved 0.25% lower to US$87.28 a barrel, while Brent crude oil price also fell by 0.1% to US$90.59 a barrel.
Similar trends were observed among other ASX 200 energy shares like Santos Ltd (ASX: STO), Karoon Energy Ltd (ASX: KAR), and Beach Energy (OTC: BCHEY ) Ltd (ASX: BPT). The Santos share price dropped by 1.66% to A$7.69 on Tuesday afternoon as it also grappled with the impact of a slightly falling oil price and news of a US$850 million senior unsecured fixed rate bond transaction.
Despite Tuesday's drop, Woodside shares have performed well over the past six months, up more than 10%, and 14.5% higher than this time last year. At the current price, Woodside shares are trading with a trailing dividend yield of 9%.
Elsewhere in the market, the S&P/ASX 200 Index managed to gain 14.60 points or 0.20% to end Tuesday at 7,206.90, thanks in part to a nearly four percent rise in iron ore prices to A$117.85 overnight. The materials sector rose by 0.82%, with Fortescue, Rio Tinto (NYSE: RIO ), and BHP benefiting from the jump in iron ore prices.
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