BP share price bounced back this week as hopes of an OPEC+ deal rose. The stock jumped to a high of 455p, which was much higher than last month’s low of 421p. It has risen by more than 33% this year alone, making it one of the best performers in the FTSE 100.
OPEC+ supply cuts
Oil stocks like BP, Shell, and Tullow Oil made a steady recovery as hopes of elevated oil prices remained. This happened as media reports from WSJ and Bloomberg reported about this week’s OPEC+ meeting.
The reports said that Saudi Arabia and Russia are considering slashing up to 1 million barrels of oil output per day in a bid to boost prices. This happened as the overall prices of oil tumbled in September, with the West Texas Intermediate (WTI) crashing to below $80.
Oil prices have bounced back this week. Brent was trading at $91 while WTI rose to $87. Analysts believe that removing more than 1 million barrels could push oil prices above $100 again. BP and other oil companies do well when oil prices are rising.
Natural gas is another catalyst for BP shares. European gas prices has done well in the past few months amid high demand and low supplies. Recently, however, prices have been in a downward trend as investors price in weaker demand from Europe ahead of winter. Besides, most countries have already filled their storage for the cold winter storage.
BP share price forecast
The daily chart shows that the BP stock price has been in a strong bullish trend in the past few months. Along the way, the stock has formed an ascending channel that is shown in yellow. It is now at the middle part of this channel
It has also risen above the 25-day and 50-day moving averages while the Relative Strength Index moved slightly above the neutral point at 50.
Therefore, the outlook for October is neutral. A more bullish view will be confirmed if the stock manages to move above the important resistance level at 468p. If this happens, it will likely keep rising as bulls target the next key resistance at 500p. A drop below last week’s low of 420p will invalidate the bullish view.