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I agree that the situation in Ukraine may cause issues for BP. On balance though I would think not, I had a look at 2014 Rosneft SP and the BP SP as that was when Crimea was annexed by Russia and both SP's seemed to be ok. I also looked at where Rosneft sold its products and most seems to go to Asia. Posting a few days ago I reckoned on a pull back to 360 (quicker that I thought though) and given that nothing goes up in a straight line, I reckon for me it is good value sub 360. One thing is that all this uncertainty is hitting the markets and when the uncertainty dissipates then the SP should regain it's upward trajectory.... Experience tells me to sit on the sidelines at the moment... Not long to go before results so we should all know more about BP's 2021 trading soon.
In his latest research note, analyst Michele della Vigna confirms his positive recommendation. The broker Goldman Sachs is keeping its Buy rating. The target price is increased from GBX 550 to GBX 600. Ukraine is the big unknown re Oil / Gold pricing, I would usually expect a pull back to circa 360. I am staying on the sidelines for the moment awaiting news, on balance the results being a day after the revised price cap announcement (7th Feb) should give some guidance. What with all that is going on in the world today oilers are a very safe place to park my money at this uncertain time.
I am not surprise to see this pull back, nothing goes up in a straight line so not too concerned. I am awaiting the finals with analysts updates prior to XD before perhaps I top up again. The fundamentals are very strong so just watching the SP. It could spring back later, you never know but perhaps given the strong run of late we may see a circa 10% retrace over the next month (should be a great update from BP early Feb, just the sell on news brigade will be a pull on the SP). No problem with this as the yield is strong as are fundamentals. Either way which way I am accumulating at the right price and the core holding is riding the waves.
Seem to remember that Ambrose Evans Pritchard wrote late last year on this subject and mused that "what if" the producers were unable to produce to target. Whilst Saudi and UAE could increase production all others inc Russia might not be able to..... The US producers are seeming to hold back and reward holders.
Me, I am on team Jeff as the guy seems to talk sense and only last week Jeff noted that there was a 2M per day shortfall (2%). That being the case perhaps Barclays at 700p is closer to the mark than we think. Come results I wait to see what GS revised SP target will be ( believe it is currently 530p).
I was hoping to buy a few more, just waiting for a re-trace. Perhaps I will have a chance in the next month though this seems to have plenty of volume driven legs at the moment.
I agree re under investment the attachments below go some way to confirming the sentiment. Light trading this week, the main SP movement will imo be next week up to the finals.
https://www.reuters.com/business/energy/opec-produces-below-target-november-compliance-rises-2021-12-20/
https://www.reuters.com/markets/europe/russia-plans-lower-oil-exports-q1-2022-despite-opec-plan-raise-output-2021-12-17/
https://www.reuters.com/article/nsea-oil/update-1-north-sea-benchmark-crude-oil-supply-to-fall-in-february-idUSL1N2TF0D8
In Europe, Gazprom has access to the working gas capacities of the following UGS facilities:
Etzel, Jemgum, Katharina, and Rehden (Germany);
Haidach (Austria);
Banatski Dvor (Serbia);
Damborice (Czech Republic).
When the need arises, Gazprom leases additional gas storage capacities from third-party companies.
By the 2019–2020 autumn/winter period, the Company’s own gas storage capacities in Europe totaled some 8.5 billion cubic meters, and a gas reserve of 3.01 billion cubic meters was created in Austrian, Hungarian and Slovakian UGS facilities under additional contracts for gas storage. As of December 31, 2019, the working gas inventories in European UGS facilities reached 11.7 billion cubic meters.
Looks like Putin holds many cards.
On a lighter note, I happened to be in the town centre with the missus today and walking down the main drag was assailed by a loud speaker system mounted at a high level warning all in a screeching tone to wear masks and keep safe re corvid etc etc..... I was then half expecting Patrick McGowan to be seen running down the road followed by a bouncing ball (Rover). Only those of my age will understand the musing. Perhaps we are already prisoners and have a number assigned.
I agree with the sentiments of the post.
See the US inflation is at 6.8%. UK's turn next week. Omicron heading the news I see, pity none of the jurno's asked Messr Whitty on the expected proportion of cases caught in hospital as it is so transmissible just almost everyone I know that went into hospital this last year came out with corvid (mild symptoms all).
The South African's call it the flu (watching a sky news item). Makes me think of the past flu pandemics and the trolleys of people with flu in A&E. To me it is looking like the Omicron might be milder than the (proper) flu. As everyone is likely to get it then this might help with everyone having antibodies soon after....
I reckon that the markets will come roaring back in the new year with the oilers / commodities to the fore. I still thing BP will be approaching £4 pre year end results. Just the Ukraine situation that might muddy the water, I see the the ICE NBP Nat Gas spot prices keep rising, this time last year 38.60 GBP , this last friday 268.80 GBP.
Hope all holders have a prosperous 2022
SP looking a bit healthier of late.. link to an update from BL
https://www.linkedin.com/feed/update/urn:li:activity:6869633784988405760/?updateEntityUrn=urn%3Ali%3Afs_feedUpdate%3A%28V2%2Curn%3Ali%3Aactivity%3A6869633784988405760%29
o/t.... One of my mates told me today that if you wanted to go to the clinic in Germany for an assisted death you need a corvid jab first.... I checked and it's true. Made me smile.
Treeshake imo. Reckon the US will steady the ship. Picked up quite a few just now circa £3.24 , its only the kids inheritance, still great divi and growing
Case of who blinks first I think re the potential co-ordinated release of oil reserves. Opec head now reported saying surplus of oil starts in December. This will provide some room for a change in monthly increase by Opec +.
I reckon it will come to a head around the next Opec + meeting. The threat being a co-ordinated release of reserves. Now Opec+ are surprisingly nimble and are likely to respond.
I do think if the taps are turned re reserves release then the POO will increase after a short dip (buy on the dips etc) In the end my money is on sabre rattling with no release as to re-fill will cost $$$ as the POO is not dropping anytime soon looking a the latest forecast from the EIA and others.
Place your bets .
Agree that with the API numbers the SP should top £3.50 tomorrow. I do wonder what the 'undisclosed tools' are that Biden has commented on re oil price.... The SPR figures are out tomorrow. The SPR cannot function properly below 20 M barrels.... it appears close to that figure having drawn down over 7M barrels the past 5 weeks and is at 26.5M barrels as at 29/10...
So.... Biden will imo not be able to draw much more SPR barrels as it is too close to the 20M barrels threshold. I am minded that he may try and twist the arm of other 'allies' to release from their reserves...
Just a sticking plaster imo... see the BOA is looking at $120 in 2022... interesting times... and good for the oil majors.
Looking at the numbers in the spreadsheet re BP Shares in issue... I have done some 'simple' maths
End of Q4 2020 - 20,264,027
End of Q3 2021 - 20,008,900
Q3 2021 shares cancelled - 221 Million (source BP)
Q4 2021 estimate shares cancelled - 260 Million (my guess)
End of Q4 2021 my estimate circa 19,750,000 shares remaining
So an estimate (subject to my maths) of just over 2.5% of shares to be cancelled in 2021.... appreciate dependant on share price.. double edged sword re capital allocation to buybacks will buy less the more the SP appreciates.... Even with an appreciating share to circa £4 then with the noises from the Q3 results into 2023 I would estimate well in excess of 3% next year....as to what the number will be .... only time will tell.
https://ca.finance.yahoo.com/news/bp-talks-buy-north-sea-191857911.html
Reckon the SP will find a bottom tomorrow. Will wait for the BOE decision re interest rates / OPEC meeting then will throw my final RDS proceeds at this tomorrow PM. Been through all comment re results and the Q&A session. Don't see anything amiss..
The majority of analysts are maintaining their target prices. With Russia playing Europe like a fish on a line gas prices imo will rise into the first snow of the season. China even paying for icebreaker LNG delivery to keep the cogs turning. I do get the feeling that the API et al stats show some element of hoarding (guesswork from me) from US industry.
See that BP are going to throw an additional $500M at Permian 2022 ... should help things along.
So... my money (well the kids inheritance) is on another leg up for oil to circa $90.
Time will tell....
Well... bit of a downer today.... what goes down will come back up imo...
Results beat analysts expectations and the SP drops .... sell on the news etc etc.... well having dumped my RDS share post the analysts miss by over 50% I have bought more BP today. Reading the results I can not see any gotcha's other than the oilers being out of favour.. The divi is great and is unlikely imo to be cut anytime soon... probably increase a lot at final's so prepared to wait as if Bank of America and Goldman Sachs are to be believed then the oilers will have their day pretty soon......
If you were thinking of selling BP perhaps these clips will change your timing of when.
https://www.cnbc.com/video/2021/10/06/how-winter-could-worsen-the-global-energy-crisis.html
https://www.cnbc.com/video/2021/10/07/why-europes-energy-crisis-is-worsening-as-prices-soar.html
Anyone noticed Diesel going up more than Unleaded, must be demand from all those Chinese generators switching on... O/T but speaking to both my coal man and wood man for the multi fuel burners they both report things have gone 'mental' over the past week or so.... coal man just trying to keep up with regulars orders , stocks running down and wood man has no stock and off to find more (if he can)... so not just oil on the up... oh also my favourite chocolate has increased in price by 20% (that's energy for me)...
Seems like US is pulling every lever to stop POO rising, in my book you cannot buck the market. Putin, well there is a man who will want more for his gas. Cannot blame him as EU have made it easy with all the hurdles re supply. Also read in the FT that the hedges are into Oil and see lots of value.... seems to me that the green leaning funds are selling and the hedges and peoples bank of china are buying.. I would expect consolidation 340 - 350 for a week or so then onwards and upwards as nothing goes up in a straight line.
Reading up of late and looking at the analysts update ( in particular Goldman....) The view is that it is the share price of oilers that will determine the the investment case for production increases. The service companies will charge lots $$$ more for drill work so the base and going forward POO will be a lot higher now than before.
It is noted that the SP of oilers have not reached the point needed for this....... so ...... I would expect the price of all oilers to increase to much higher levels for the case to be made. In the meantime OPEC + have the whip hand and I suspect the POO will need to be sustained $100 + for a month before additional production is allowed.
Winter is approaching, massive substitution for NAT GAS ( oil) as asia equivalent price is shy of $200 barrel ..... sure the SP's will overshoot, the trick is to spot it. Me I see nothing on the horizon to suggest we are anywhere near the SP overshoot.
Well done to all long term holders.
In Europe, gas prices continue to soar.
The Title Transfer Facility (TTF), a Europe-wide virtual trading point for natural gas in the Netherlands, reached the 100 euros ($116, £86) per megawatt-hour (MWh) mark for the first time in its history on Friday.
This is five times more than at the start of the year, while oil prices have doubled over the same period.
European gas is now roughly twice as expensive as Brent North Sea crude oil -- which cost $80.75 dollars per barrel on Tuesday, its highest price in three years -- using notoriously difficult conversion methods
"Asia spot natural gas prices are now trading at near the equivalent of $180 per barrel of Brent crude, meaning that oil's appeal as a gas substitute for power generation is almost irresistible," said Jeffrey Halley, senior market analyst at OANDA.