BP’s Stock Returns in 3Q17: What Its Moving Averages Suggest
BP stock performance in 3Q17
BP (BP) stock stands eighth in our list of top ten integrated energy stocks. In the previous part, we reviewed ENI (E) stock, which rose 7.4%.
BP stock has risen 5.8% since July 3, 2017, outperforming the broad market indicator, the SPDR Dow Jones Industrial Average ETF Trust (DIA). DIA has risen 4.7% in the same period. BP’s peer PetroChina (PTR) rose 3.6%, but ExxonMobil (XOM) stock fell 0.8% in 3Q17.
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BP’s moving averages
In 3Q17, BP’s 50-day moving average (or 50-DMA) has broken below its 200-day moving average (or 200-DMA), which is a bearish technical indicator. BP’s 50-DMA stood 0.7% above its 200-DMA on July 3. However, as BP stock declined, its 50-DMA broke below its 200-DMA. BP’s 50-DMA stands just 0.6% below its 200-DMA.
In such a situation, if oil prices rise or if the company faces any positive news, then BP’s 50-DMA could swiftly cross over its 200-DMA, putting it back in technically bullish territory.
Why the rise in BP stock?
BP stock’s correlation coefficient versus WTI for the past one-year period, stood at 0.54, implying a positive correlation. WTI prices rose 8.4% in 3Q17, which probably supported BP stock.
BP’s 2Q17 earnings, which it reported during 3Q17, surpassed estimates. For more on these earnings, please refer to BP’s 2Q17 Earnings Beat Estimates, Stock Rose 3.2%.
During the quarter, BP announced an IPO of its wholly owned MMLP, BP Midstream Partners LP. The IPO is anticipated to hit the market in 4Q17, subject to market conditions. Also during the quarter, BP and Bridas agreed to create the largest private integrated energy company in Argentina.
Specifically, Pan American Energy (with an upstream portfolio) and Axion Energy (with downstream assets) would be merged to create Pan American Energy Group (or PAEG). The merger would generate significant operational and financial synergies for PAEG.
During 3Q17, BP started production at several important upstream projects. Overall, BP started production at six of the seven major upstream projects in 2017.
In the next part, we’ll look at PTR’s stock returns in 3Q17.