The mornings lull was followed by an uptick which was from what I can see due to the Man from OPEC saying he thought the price of oil had bottomed out. There's also been a few stories about how soon the price of oil will recover due to all the cutbacks. Should be an interesting next couple of weeks for BP, results next week, & ex div the week after. I'm hoping results are factored in so no surprises and as rising price of oil is anticipated to see 450 to 460 for ex div. Or am I dreaming ? Comments welcome....
I totally get that the share price is volatile due to oil, I also get there's a lot of worry about the fine coming soon. What I do not get is why it would drop 8/9p this morning to go up 6p this afternoon. A daily spread of 14p?? The force is strong with this one!
The challenge for BP is not so much the oil price but the open ended nature of US litigation fines.
Once the legal costs associated with the US is capped; we shall have greater clarity about the company's trading outlook and dividend level over the next 12-18 months.
Large companies such as BP are very cautious in budgeting for lower oil prices which is a good thing resulting in lower share price volatility hopefully.
Notwithstanding the above; I personally feel the oil price is bumping along the bottom and it may go lower still due to short selling by Hedge funds or Derivative Traders but I am quietly confident we shall see an oil price in the $55-60 range in 8/9 months otherwise a lot more people will lose their jobs in global Oil Exploration industry plus replacement work for diminishing reserves will low down to a snail's pace.
Remember: for every barrel of oil produced daily; two barrels are consumed according to OPEC and US Government.
Personally I think the oil price is likely to rise now. Saudi can soon stop gushing as it settles into a new era, and they are hurting themselves with low prices. Shale has had a warning shot, though I do believe oil won't go much above the price of shale....more than $50 but less than $100. BP will soon know it's punishment and then it will be game on again. I'd say we'll hit 450 by the end of Feb......
"Chief executive Bob Dudley said BP is preparing for the price to stay low for at least a year." Considering the problems he has endured I am amazed how he continues to steer the company and is planning ahead. There will be problems caused by low oil price and Rosneft / Russia, but the GoM court case is coming to a conclusion and the final decision should clear the way upside for BP.
The spectacular slump in the price of oil to less than $50 (Â£30) a barrel could remain for another three years, sending petrol prices to below Â£1 a litre, the boss of BP predicted yesterday. Chief executive Bob Dudley said BP is preparing for the price to stay low for at least a year and there was no guarantee the price will rise. Brent crude has crashed 60 per cent since June to around $48. But Italian oil group Eni's chief executive Claudio Descalzi called for more stability in the markets and said prices could hit $200 in four years. The industry has cut investment and jobs in the wake of the price crash with hundreds of job being lost in the UK's North Sea industry. Descalzi predicted the entire oil industry will cut spending by up to 13 per cent this year as a result.
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