What Next For BP Share Price After Q2 $6.7 Billion Loss?
Fiona Cincotta August 4, 2020 1:23 PM
BP announces a better than expected $6.7 billion loss, the share price jumps 7%
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 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%.
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.
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.
GAIN Capital UK Limited (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.