The BP share price bounced back, helped by optimism of the global economy and the higher oil prices. The stock is trading at 298p, which is 3% above Thursday’s close. Similarly, the Royal Dutch Shell share price has jumped by more than 1%.
What happened: On Friday, the US reported that the economy added more than 900,000 jobs in March. In the same week, Markit said that the global manufacturing PMI rallied in March as more countries reopened.
Further, more companies are accelerating their vaccination drive, with some, like the UK planning a full reopening soon. These numbers have pushed the price of crude oil higher, which is supportive of the BP share price.
The BP stock is also rising after the company announced that it would restart buying back its stock after reaching its $35 billion net debt target. This happened because of the recent decisions by the company to sell some of its assets. It is selling assets worth more than $25 billion in the next few years. It also benefited from bumper results of its trading division, which has become a pivotal money-maker or the energy supermajor. The firm said:
“BP is committed to returning at least 60% of surplus cash flow to shareholders by way of share buybacks.”
BP share price forecast
The four-hour chart shows that the BP stock price has bounced back after falling last week. It is trading at 298p, which is above last week’s low of 290p. It is also between the black ascending channel that connects the lowest levels since November and the highest points since December.
However, the share price has formed what seems like a head and shoulders pattern. In technical analysis, this pattern is usually bearish in nature. Therefore, today’s rally may be a dead cat bounce, meaning that the shares may resume the downward trend. For this to happen, bears will need to move below 285p, which is along the ascending trendline.
BP Stock Price Chart