Oil prices have returned to the upside after Monday’s slight decline, with the Israel-Iran war escalating. BP share price responded to these developments by climbing up by 1.7% to trade at 389p in late European trading session on Tuesday. Initial news of a potential ceasefire between the two nations has been neutralised by increased attacks by both sides, with the G7 summit failing to come up with a clear-cut plan for a de-escalation.
BP share price is on an upbeat momentum after gaining 4.5% in the last five trading sessions, reflecting the performance of the broader oil industry. Investors are buying into the geopolitical risk premium in the Middle East that threatens to disrupt supply of the world’s most traded commodity. Benchmark Brent crude oil price has risen by 7.2% in the last five sessions, with West Texas Intermediate (WTI) having gained 6.1% in a similar period.
While BP share price upside is supported by strong upstream earnings in the first quarter of the year, the company is weighed down by a $27 billion debt pile. Also, there remains investor concerns over its continued underperformance relative to rivals like Shell, ExxonMobil and Chevron amid a detour from its renewables strategy.
Nonetheless, the stock’s near-term performance is likely to stay on the uptrend, with oil prices back on the upside. As of this writing, Brent, which is more sensitive to geopolitical events was up by 3.62% while WTI was at +0.2%.
BP Stock Price Prediction
The momentum on BP stock price calls for further upside above 388.10p. The stock will likely meet initial resistance at 392.35p. However, a stronger momentum will clear that barrier and potentially test 396.30p in extension.
On the other hand, action above 388.10p will favour the sellers to take control. That could see primary support established at 384.50p. Breaking below that level will invalidate the upside narrative and potentially clear the path to test 380.10p.
