Woodside looks to have averted a possible strike at its liquefied natural gas (LNG) facilities off Western Australia’s northwest coast after members of the Offshore Alliance voted to support an in-principle agreement that the two groups had reached.

The fact that Woodside Energy Group (ASX:WDS) has acted quickly to prevent potential industrial action by members of the Offshore Alliance – an alliance between The Australian Workers’ Union (AWU) and the Maritime Union of Australia – shows just how much it values having its facilities operate without pause.

And why shouldn’t it?

Australia’s largest LNG producer delivered a record first half net profit after tax of US$1,740m ($2,685.37), up 6% from the previous corresponding period, on record production of 91.3 million barrels of oil equivalent – though this is up 66% due to its merger with BHP’s petroleum arm in the middle of 2022.

While average realised prices have retreated from the record highs enjoyed in 2022, they still make for impressive reading and Woodside is clearly not keen to lose what is still very much a good thing going for it.

But Australia’s LNG sector isn’t entirely out of the woods yet.

The deal with Woodside leaves US supermajor Chevron in the unenviable position as the only LNG player without an enterprise agreement in place.

How it would react now is unclear. What is clear is that with Woodside choosing to reach an agreement, LNG buyers concerned about the potential of supplies being disrupted can now breathe a sigh of relief.

After all, when news first broke out about potential strikes, it sent gas prices soaring on concerns that it would impact global gas supplies.


Oil slips on bearish Chinese data

Crude oil prices have slipped in the past weeks on concerns about the strength of the Chinese economy, though they still remain elevated compared to where they were just a month or two ago.

Where they go from here, though, is up for question.

For one, Iranian oil exports – most of which are sold to China – have climbed to more than 2 million barrels of oil per day, and it has plans to increase output to 3.5MMbbl/d by the end of September.

Needless to say, this could have a depressive effect on crude oil prices, which is not going to be received warmly by Saudi Arabia and its compatriots in OPEC.

Meanwhile, the US Energy Information Administration has reported a larger than expected 6.1 million barrel draw on crude oil inventories for the week to 18 August following a surge in refinery processing.

Whether this is an indicator of greater oil demand in the US is unknown but it did little to impact prices as investors remain concerned about the possibility of another US rate hike and the state of China’s economy.

It isn’t too much of a stretch to guess though that should crude oil prices continue falling, we can reasonably expect Saudi Arabia to at least extend its existing production cuts – something that analysts polled by Reuters believe is likely to be the case as well.