FYI - AWE mentioned as having 'upside' .....Shares in Woodside...

FYI - AWE mentioned as having 'upside' .....

Shares in Woodside Petroleum Ltd traded heavily on Tuesday as analysts continued to back the stock as it hovers near an all-time high.

A market favourite, Woodside ended down five cents at $18.65 on turnover of 2.3 million shares, after hitting another record high on Monday on the back of strong oil prices and an announcement that its half year net profit would beat average analysts' earnings by 10 per cent.

Goldman Sachs JBWere said it had considered downgrading its recommendation on the stock, currently short term "market perform" and long term "buy", after Monday's sharp price appreciation.

But it decided to retain the rating because of upcoming exploration in Mauritania, the prospect of ongoing oil price highs, the suite of investment decisions planned for the second half of the year, and Woodside's identified growth profile.

The brokerage also increased its earnings estimate for Woodside for the six months to the end of June by 3.4 per cent to $305 million to reflect the company's guidance.

The figure does not include its foreign exchange gains estimate of $40 million after tax, which Goldman Sachs said it regards as a significant item and not part of the net profit forecast.

Deutsche Bank has also retained its "buy" rating on Woodside because of the high oil prices, and has a target price for the company's shares of $21.00.

But it's not just the top end of the energy sector that is reaping the benefits of continued near record oil prices, which saw US crude oil futures hit $US43.92 a barrel in pre-opening trade in New York overnight - their highest point since trading began on the New York Mercantile Exchange 21 years ago - before dropping back once the market opened to close at $US43.65.

Two-thirds of Australian oil stocks are hovering within three per cent of their year highs.

Until the oil price eases, analyst Marcus Padley said there is unlikely to be any significant selling of the major oil stocks, or a loss of "faith" in the minors.

"It's all about the oil price and that's all about China and terrorism and the long term story ... the exhaustion of fossil fuels (imagine what that would do for oil exploration company share prices)," Mr Padley said in his MarcusToday newsletter.

"The big question is how much is left and which stocks."

The most likely upside is in the smaller stocks such as Australian Worldwide Exploration Ltd and Roc Oil Co Ltd, Mr Padley said.

"People are seeing these huge rises already in things like Hardman Resources Ltd and wondering what the next one is," he told AAP.

"It could well be AWE and Roc, not because of any fundamental assessment but just because they're a bit smaller and maybe people haven't trusted them as much.


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