The BP share price will be in the spotlight today after the sudden drop of crude oil prices and as investors react to the firm’s new hydrogen investments. The stock ended the day at 311p, which is 4.47% below its year-to-date high of 326p.
What happened: As an oil supermajor, BP benefits substantially when oil and gas prices rise. Indeed, its stock has jumped by more than 65% since November last year as the price of oil has rebounded. However, the price has fallen in the past few days.
The price of Brent and WTI declined by more than 7% in the overnight session as investors continued to worry about demand. This is a sign that the BP and Royal Dutch Shell share prices will go through a pullback today.
Meanwhile, the BP stock will react to the company’s major investments in hydrogen power. The company is planning to invest millions of dollars in a hydrogen factory in Teesside to provide energy for local and industrial clients. This is in part of the company’s overall strategy to diversify its income from fossil fuels. It aims to be net zero emissions by 2050.
BP share price forecast
Looking at the four-hour chart, we see that the BP stock is at an important level. The shares formed what looks like a double-top pattern at 325p this month. In technical analysis, a double top and double bottom are usually reversal patterns. Also, the stock is trading at important support since it formed another double-top pattern there in January this year.
The stock has also crossed the 25-day moving average. Therefore, in my view, I suspect that the BP share price will decline in the near term as bears target the next key support at 300p. However, a move above 325p will invalidate this bearish thesis.
BP stock chart
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