Member Info for MarkGo

Hi all

The price of oil drop last week was partly due to worries that KSA will reduce its unilateral cut at this weeks JMMC on the 4th October due to higher prices.

Informed insiders believe that no recommendations to change the current opec plus policy is expected at the upcoming JMMC on the 4th of October. This means the groups 2 million bpd cut will remain in place until the end of 2024 as per the current agreement. 1m bpd Opec+ cuts and 1m bpd KSA lollipop cut.

If so, this will be eally supportive of oil price. Together with temporary US debt deal. I'm hopeful for a positive market reaction as the week progresses.

Only 30 days until quarterly results.

Https://seekingalpha.com/article/4635272-bp-oil-at-90-translates-to-rating-upgrade

Hi Theaky

This is just a discussion forum where all views are equally valid and welcomed. Either bullish or bearish they're all just personal opinion, nothing more and nothing less.

I don't believe anyone would make an investment decision based on any contribution to this forum without primarily carrying out their own due diligence but any additional research, analysis, access to data from the forum can be of assistance as a useful add-on to that diligence. Some posts more useful than others !

Your warning to 'Beware the rampers' implies far too much imagined relevance of this forum in its ability to move or drive up the share price by even a nano point. To issue such a warning is unnecessary in my opinion and beyond possibility. No Mystic Megs, either as far as I can see. Just contributors, like you, taking the time to informally share their analysis and thoughts for others to read or ignore, not for investors to buy or sell, just for information.

I do understand the practice of 'selling into strength'.

Would selling into strength be a good strategy if you sold at 5.00, 5.10, 5.20, 5.30 ?

None of us can predict the future and work out exactly when BP will reach the top of its current range but selling into strength should be aligned with momentum and practiced when you sense the company is starting to look toppy, overbought and struggling to move higher.

None of which applies to BP at its current share price.

A profit is a profit but patience will be rewarded.

Good afternoon meoryou, gingy

I hope all's well with you.

Thank you meoryou, my hope and expectation was based on research on data and the direction of fundementals that looked extremely positive back in late July early August.

Slightly foolish to make predictions as unpredictable events could always result in egg on your face but I am happy that all the data on oil supply and demand, inflation and the interest rate cycle pausing/ peaking has played out nicely.

On events, the Evergrande crisis is currently on my 'market wobble watch list' due to its possible finacial contagion with its international debt liabilities, US debt negotiations also on my list, however, there will always be such events and the reaction depends partly on the strength or weakness of global economics and the markets at the time. I expect that we are now witnessing the market turning positive preceding economic turnaround. There are a few sectors that should do well over the next 6-9 months but energy stands out from that select group. N the energy sector, there are a number of US / Canadian O&G companies that could perform better than BP in my opinion but I am more confident of a less volatile, more sustainable growth over the medium to long term with BP and their integrated energy strategy.

I posted on the 8th August that I expect by the next quarter results £4.90 will be seen as a missed buying opportunity. While I expect some profit taking on the journey I also expect that today's share price will be viewed the same way.

Charlie. It's always good to bank a profit, however, your reasoning and logic for selling now is questionable along with your timing in my respectful opinion.

Great day all

Good morning Spights, meoryou and all

Gingy, something I have learned through experience is not to micro view the share price. That way, I do not suffer the disappointment or daily, weekly ups and downs of the market. I'd rather focus on fundamentals rather than market makers shenanigans. As a long term holder you are invested in best sector to be invested at this time. BP is on an upward trajectory with temporary dips on that journey.

The best is yet to come

Just in from Bloomberg

' US oil stockpiles at critically low levels'

Good morning all

I haven't checking in for a while and I hope all are well.

Predictions are a fools game fraught with danger as unpredictable events, such as the loss or the CEO, can ruin any amount of research, so I am very happy to see my hopeful share price prognosis for late September was correct. With the benefit of hindsight, the sticky May to August share price period can now be seen as an ideal, taken or missed, opportunity to top up with a 70p - 16% increase in just 9 weeks.

Due to BP's recent good form, returning to the board I expected to read more positive posts than, what can only be described as, historical gloom and an unhealthy fixation by a few on the company's past performance or share price.

You would not drive your car by looking in the rear view mirror so why look backwards in regard to investing in BP as this has zero worth. Better to focus your attention and time to the present and future. Even with the recent rally this is a fantastic time to be invested in BP and other energy equities. One view from the past that does have some value is that markets bottom out and turn before economics. With inflation looking like it is under control ' for now ' the cycle of interest rates seeming to have peaked, global recession worries falling, China stimulus in play and oil demand climbing with tight oil supply and historically low global inventories, anyone invested today at the current BP share price should be feeling very positive for their investment going forward. Energy is the number one sector to be invested in for the next 6 to 9 months and BP as an undervalued company within that sector should do very well

I expect BP will surpass their previous all time high in the coming 6 to 9 months with another 17%+ rise from today's share price which will then be viewed as another missed or taken opportunity.

In my opinion , the best is yet to come.

Have a great day

Hi Planit

Great post. My position but put more persuasively and eloquently.

Let's not forget, it's not either investment in the transition or O&G, its both. Energy needs now are hydrocarbons and will be for decades to come and BP are investing in O&G in parallel with the transition, focusing on high grading their O&G portfolio ditching only high cost, low profit barrels.

Seems sensible to me as an investor.

Morning all

Giving an opinion on renewables and recommending BP abandons part of the transition based on today's environment, is short visioned. I agree that currently the sums do not add up with offshore wind but there is pressure being applied to governments where offshore wind licences have been auctioned to raise subsides or face companies walking away and governments not achieving renewable energy targets. I am willing to give Looney time. Let us at least wait for the negotiations to play out. Looney has already said that projects have to be viable and profitable. CFD (contracts for difference), which guarantee a fixed price for renewable energy, needs to be increased to make renewables viable today with today's inflation in the supply chain etc and many othet renewable companies are also lobbying for this in many countries.

Transition returns on investment.

In regard to the five transition growth engines, as Looney calls them, let us not throw the baby out with the bath water just because of current headlines. According to BP, they expects a return on investment of at 'least' 15% on bioenergy including biogas as well as from combining EV charging with retail stores. Hydrogen is seen bringing in 10% returns, with renewables lagging at a maximum of 8%. BP's integrated energy model will require energy produced by their own offshore wind to feed into its own hydrogen production which does not require fossil fuels, instead it uses power from renewable energy sources such as offshore wind turbines to convert water into hydrogen and oxygen. So the wider picture is more complex than just recommending n abandonment of renewables.

There is so much to more consider beyond what is visible today. The globe, rightly or wrongly, is committed to moving away from hydrocarbons in the long term and increasing renewables. For BP to abandon their long term transition strategy due to short term conditions would not be in the best interests of the company or shareholders over the long term.

Have a great day

Mark

Evening all

Interesting Reuters article. Link below.

Two snippets......

Looney Quote

"We will grow in sectors that will not be correlated to the oil price. That will be very, very valuable," he said.

"We can sit here today and say, is oil going to grow at 1% per year, 1.5%, or half a percent? We can debate that natural gas is going to grow at 2%."

"If I look at sustainable aviation fuel, if I look at biofuels, if I look at biogas, if I look at EV charging, these are sectors which are growing at double-digit rates."

and...

Renewables and low-carbon still account for a small portion of the group's revenue. In the first half of 2023, the so-called "transition growth engines" accounted for $700 million of a total $23 billion in core BP earnings.

Looney expects the transition businesses' earnings to grow to $3 billion to $4 billion by 2025, and as much as $12 billion by 2030, roughly one quarter of total core earnings.

Sounds good to me.

Article

https://www.reuters.com/business/energy/bps-looney-holding-his-nerve-over-energy-transition-plan-2023-09-05/

Hi meoryou

I hope you're well.

If my memory serves me well, I think I recall you topping up near the previous highs and there was ample sound reason for you to do so. I also have been topping up at various prices on the way down, with the benefit of hindsight, each purchase not optimal timing either on price but over the medium to long term I hope and expect all purchases, including your top up price, will be looked back on as excellent shrewd investing.. So rather than buying too many, who knows, one day we may regret not buying more !!

Just to add to my previous post's reasons for optimism, studying sector volumes, some of the fall after Q1, I suspect, was partly due to fomo with some investors rotating into the growth/tech rally. Some good returns on certain investments in growth/tech have been achieved this year but the sector now looks toppy to me with volumes now down beyond seasonal levels.

I suspect we are starting to witness a rotation from growth into value and the best placed sector for growth going forward is the energy sector.

Enjoy the lovely evening all.

Mark

Good morning Spights & all.

Thank you Spights. Nice positivity around on the board and I believe that this positivity is well justified at this time. I am as confident as you can be when it comes to equities that there is plenty more to come in BP's ' recovery' over the next 6 to 9 months.

Beyond that it is unclear if the time lag on the effects on excessive quantitative tightening will force a western recession, or the opposite, if inadequate QT will see the return of inflation. Either could be tough for equity markets at that time. What a mess they have got us in. ! However in either scenario, oil demand is global and a booming asia and China should put a floor under oil and energy equities one would hope.

Back to the present. I expect the long time malaise is now over in regard to BP.

A long way still to go in the journey, with the usual speed bumps along the way, but with an end to lower seasonal trading in 2-3 weeks, a Chinese stimulus package expected, a realisation of the dire state of global oil inventories, a three pronged Opec, Saudi & Russian cuts strategy, record global oil demand ( ignore the opposite media view ) and possibly not the extremely mild winter of last year incoming, what other sector and companies would you rather want to be invested in for the foreseeable than energy companies such as BP ?.

....and over the horizon there is the expectation of the returns of investment in renewables starting to hit from 2025 onwards. ( meoryou, you are 100% correct that some projects ( EV charging) are profitable and growing now with investment costs being stripped out returned to the balance sheet now) So an excellent long term outlook as well.

So all very, very positive.

Have a great day all

Evening all

All coming together rather nicely as we move in response to oil as expected and hoped for with more to come.

Regarding buybacks Share repurchases are restricted to no move than 25% of the average daily trading volume of its shares in the ten trading days preceding the day in which such purchases are made. This restriction answers the much asked question, why did they not front load buybacks when prices were lower ?

Onwards........

Mark

Hi Clued and sll

Clued, in answer, my writings with data sourced from various respectable institutions and fact checked, financial media.

On trading volumes. The seasonal trading period from May to September/October usually results in lower volumes and liquidity and higher volatility as a result.

Here's a more detailed explanation from Tradimo.com.....

"Sell in May

Share prices tend to fall over the summer months as fund managers and big institutional traders go on holiday.

They often sell some of their shares and other assets before they go away. This is so that their investments are at less risk of taking a big hit if markets fall suddenly while they are not at their trading screens to respond quickly.

This has led to one of the most famous stock market sayings: "Sell in May and go away – don't come back till St Leger Day." It calls on investors to sell their shares in May and buy them back in September.

St Leger Day refers to the date in early September when a famous horse race is run in Britain.

Because trading volumes and liquidity are lower over the summer, it is easier for one big trade to push prices around. Therefore share prices can be more volatile over this time and trading can be higher risk.

Many big traders go on holiday for the summer and sell out of big or risky shareholdings first, pushing their price down. The old “sell in May” saying advises them not to buy shares back until September."....

The speech is now over and although wiping out the day's gains, as expected. The response has been limited so far. Yesterday's losses preempted todays speech.

On to next week.

Great weekend all.

Mark

Not so happy Friday.

Another day, another drama.

With BP bopping up and down like a bouy in choppy waters, the storm cloud and main hurdle event of the day is Jerome Powell's Jackson hole speech (around 3pm uk time)

Last years speech saw stocks plummet after Fed Reserve Chair Jerome Powell said that central bank won't back off in its fight against inflation. The Dow dropped 1,008.38 points, or 3.03%, to 32,283.40, with losses accelerating into the close. The S&P 500 fell 3.37% to 4,057.66, and the Nasdaq Composite slid 3.94% to 12,141.71. Powell, this year, will want to reinforce last year's speech with tough inflation fighting rhetoric of higher interest rates for longer.

I expect that the US markets, as last year, as a reaction will fall sharply after the speech unless a totally unexpected speech.

Yesterday's sell off late in the US contaminated the far east markets overnight and I expect the UK and European markets today will have a negative day and could really dip come the end of the day.

Any good news ? We are still in seasonal low trading which magnifies the volatility in the market. Yesterday's BP trading volume (16.1 M) remained 21.6 million below its 50-day average volume of 37.7 M. Stability will return come late September.

All the best

The seven-week old oil price rally triggered by tightening oil markets has suddenly hit the skids after weak economic data coming from China weighed on market sentiment. China's worsening property crisis has raised serious concerns about the health of the economy in the world's biggest oil importer and lowered risk appetite across markets.

Yet, oil consumption figures in China have held up, suggesting those worries might be unwarranted.

https://oilprice.com/Energy/Crude-Oil/Seven-Week-Oil-Price-Rally-Ends-But-Fundamentals-Support-Bulls.html

Afternoon all.

EIA data, week ending 18/08/2023

Crude oil: -6.1M ( Estimate - 2.85m )

Domestic prod: 12.8MMbpd

SPR: +0.6M

Cushing: -3.1M

Gasoline: +1.5M

So, away from the manipulation and side show of the daily markets, another week of ~6mm+ crude draw. Globally, oil inventories are plummeting and will continue to do so regardless.

With the fear of sounding like a broken record, the daily movements and manipulation of the paper (financial) market, and the subsequent movement in energy equities has no correlation to the fundamentals of the physical market of oil demand and supply.

In my opinion, the longer the paper market manipulate the market the higher the price will eventually go with BP on its tailcoat. This is coming soon.

All the best

Mark

Morning all

Answer. North.

It is inconceivable to me that BP will not move higher in the months to come. We are still in the seasonal low trading volumes for the next 5-6 weeks. I expect this stubborn trading range to end then, if not before, with traders rebuilding their portfolios with energy stocks looking extremely attractive.

Oil at $80+ is established now with minor dips and bounces and in my opinion the next few months should see the sustained demand and tight supply pushing oil higher despite attempts to suppress the price The hypocrisy of the Biden government in turning a blind eye to a terrorist state, Iran and Iranian production and Iranian sactions has allowed Iran to ramp up production ( selling to China ) to their near capacity of 3+m a day to attempt to dampen the price yet this extra supply has been absorbed without negatively affecting the price which is a positive. The negative is the additional revenue Iran is receiving is allowing them to escalate their nuclear intentions according to monitoring sources. So much for restrictive sanctions.

In addition to the hypocrisy, Biden's cancelling of the Keystone XL pipeline from Canada to the US due to the environmental lobbying wing and then begging Nicaragua, with their sanctions and death squads, to supply oil to US tells you all you need to know about principles and morals when it comes to the US government and oil.

Anyway, despite these shenanigans, negative stories, control attempts, day to day dramas, I am hopeful and expect that holders will see previous recent highs topped in the not to distant future.

Have a great day all

Morning J.S.B

You are welcome. BP did cut the dividend in half in 2020 in response to the oil crash caused by the pandemic. In April 2020 oil was trading negatively for a short while. Oil turned negative for the first time on record due to oversupply, global storage at capacity and lack of demand due to the global lockdown. Hopefully, a once in a lifetime occurrence.

Since then they have been rebuilding the dividend. Still a way to go but they have raised the dividend 4% last year and 20% this year. I expect the rebuild to continue over the coming years. Excluding any catastrophic unpredictable events such as another coronavirus of course !!!

Have a great day.

Mark

J.S.B

A word of advice. Maybe do your own research and certainly do not give any credence to Fool's articles. They are notorious at flip flopping from day to day.

For your information

From BP

Growing distributions; updating disciplined financial frame

A resilient dividend remains bp’s first priority within its disciplined financial frame. It is underpinned by a cash balance point of $40 per barrel Brent, $11 per barrel RMM and $3 per mmBtu Henry Hub

Based on bp’s current forecasts, at around $60 per barrel Brent and subject to the board’s discretion each quarter, bp expects to be able to deliver share buybacks of around $4.0 billion per annum, at the lower end of its capital expenditure range, and have capacity for an annual increase in the dividend 4%.

Moving to their disciplined financial frame.

Our first priority remains a resilient dividend. This is underpinned by an average cash balance point of around $40 per barrel through 2025.

Our second priority is to maintain a strong investment grade credit rating, and we intend to allocate 40% of 2022 surplus cash flow to further strengthening

the balance sheet.

Third and fourth, we will continue to invest with discipline into the transition and resilient hydrocarbons. Our capital expenditure guidance for 2022, including inorganics, is now expected to be around $15.5 billion if the acquisition of Archaea Energy completes before year end. And our medium-term guidance is unchanged at $14 to 16 billion per annum.

Fifth, we remain committed to returning 60% of surplus cash flow through share buybacks, subject to maintaining a strong investment grade.

So relax, the dividend is affordable at $40pb and at $60pb the five priorities affordable as detailed above.

If oil drops below $40, we would have much more to worry about than the dividend !!

All the best

Mark