BP plc. (LSE: BP), British multinational and ‘supermajor’ oil and gas company has joined the likes of rivals Shell, ExxonMobil, and Chevron, benefitting from the surge in energy prices amidst Russia’s ongoing invasion of Ukraine, reporting a record-high profit of $28 billion for its 2022 financial year.
While shareholders will be pleased with BP hiking dividends by 10 per cent against a surge in profitability, climate-conscious investors may be somewhat concerned over the company’s decision to scale down on its green energy target. With the average monthly Brent crude oil price climbing from $74.17 per barrel in December of 2021 to a high of $122.71 per barrel in June of 2022, BP enjoyed a surge in profitability. Still, climate activists were less than impressed with the supermajor’s decision to reduce ambitions to cut carbon emissions. Previously, BP had targets to minimise hydrocarbon output by approximately 40% by 2030 compared to 2019 levels, but that has been revised down to 25%, reflecting a significant detour in the company’s journey towards net zero carbon emission.
With BP reporting a quarterly earnings per share (EPS) figure of $1.59 for December, exceeding expectations of $0.27 per share by just under 500%, and overall quarterly revenue coming in at 15.48% above expectations, the ‘supermajor’ oil and gas company enjoyed the rally in oil and gas prices throughout 2022, reporting the most significant annual profit in its 114-year history.
Technicals:
The price action has been trending higher throughout 2022 against the surge in global oil and gas prices. Closing at £4.78 on Monday, BP saw its share price gap higher to open at £4.94 on Tuesday 7th of February as market participants expected an impressive earnings release. Closing at £5.16 on Tuesday, 7.95% up from the previous day’s close, bullish sentiment saw BP’s share price test and break through the significant resistance level at £5.04 (red line). Market participants will watch the price action closely to gauge whether a potential rebound could provide a better entry point for traders and investors.
The bears could see the price action reverse and decline towards the £4.72 support level (higher black dotted line). If market sentiment turns negative against BP’s announced plans to scale back on green energy targets, the bears could see the share price decline towards the £4.55 support level (lower black dotted line).
Summary:
Despite an awe-inspiring earnings release, market participants will remain wary of how the price action evolves amidst announced plans to cut back on carbon reduction targets. Market participants will also remain attentive to how the Brent crude oil price evolves over the coming months.
Sources: Trading View, KoyFin, The Guardian, BP, Reuters, BBC, Statista
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