CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

What Next For BP Share Price After 67 Billion Loss

Article By: ,  Senior Market Analyst
August 4, 2020 9:23 AM
The focus when BP reported today was always going to be in the dividend. After rival Shell slashed their dividend by 2/3rds surely it was only going to be a matter of time until BP followed suit?

BP cuts its dividend for the first time in decade after plunging into a record loss as the coronavirus pandemic crushed energy demand. The dividend was slashed by 50% to 5.25 cents, down from 10.5 cents a share. The last time that BP slashed its dividend was after the Deepwater Horizon oil spill.

Ugly but could have been worse?
BP reported $6.7 billion loss in Q2, compared with profits of $2.8 billion in the same period a year earlier. Whilst this is a very grim number, investors had been bracing themselves for worse, with expectations of a$6.8 billion loss. Thanks to the better than forecast loss investors are managing to look beyond the larger than forecast dividend cut sending the share price has soared 7%.

In Q2 the average price of oil declined by more than half to $29.50 a barrel, down from $70 per barrel in early January. This slump forced BP to announce write offs to the tune of $17 billion whilst also slashing 10,000 jobs to shore up the balance sheet.  BP breaks even at $40 per barrel.

The future’s green
With the demand for oil expected to remain weak and long term price forecast of oil remaining depressed pressure is expected to remain on oil majores. BP committed to its drive towards net zero. Ahead of the strategy presentation next month CEO Bernard Looney said the firm aims to increase its annual low carbon investment 10 fold to around $5 billion per year.  BP will also cut emissions and invest heavily in renewables.  

Chart thoughts
BP had been trading around -50% YTD after the covid rebound stalled early on. Today’s 7% jump in BP’s share price has push it above its descending trendline, which had held since early June. A close above trendline resistance turned support at this key 300p level could see the share price attack resistance in the region of 310p – 315p the 50 & 100 daily moving average.
Should BP fail to close above 300p then we could see the stock continue its downward trend towards 270p and 222p the March low.



StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024