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BP’s Outlook: What Do Its Financials Suggest?

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Part 7
BP’s Outlook: What Do Its Financials Suggest? PART 7 OF 17

How BP Stock Is Performing against SPY in 3Q17 So Far

BP’s stock performance

BP (BP) stock has risen 9.1% in 3Q17 quarter-to-date. In comparison, Chevron (CVX) and Royal Dutch Shell (RDS.A) have risen 12.4% and 11.8%, respectively, in 3Q17 quarter-to-date. 

The SPDR S&P 500 ETF (SPY) and the SPDR Dow Jones Industrial Average ETF (DIA) rose 3.2% and 4.7%, respectively, in 3Q17 quarter-to-date. However, ExxonMobil (XOM) fell 1.0% in the same period.

How BP Stock Is Performing against SPY in 3Q17 So Far

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WTI rises in 3Q17 so far

Integrated energy stocks typically show high positive correlation to crude oil prices. So, a rise in WTI prices in the current quarter could have boosted these stocks. We’ll discuss this topic later in this series.

In 3Q17, WTI prices have been significantly influenced by Hurricane Harvey. The hurricane, which made landfall in Texas on August 25, led to a crude oil inventory glut in the US market. This glut occurred because ~30% of refining capacity in the US was impacted, leading to shutdowns or a reduction in operating levels. 

This event resulted in a drop in crude oil demand from American refineries, leading to an inventory build-up. Most of the refineries have restarted, with the aim of processing crude oil at pre-hurricane levels. As a result, the excess inventories in the market have started declining, leading to a rise in oil prices.

Overall, WTI prices have risen 10.0% in 3Q17 quarter-to-date.

BP stock also rises

The volatility in oil prices due to Hurricane Harvey may have also affected BP stock in 3Q17. BP stock, which had lost 1% from July 3 to August 28, has gained 9.1% from July 3 to September 22. This increase is due to a rise of 9.5% in BP stock from August 28 to September 22.

BP stock has risen in the current quarter following rising oil prices. BP’s better-than-expected 2Q17 numbers may have supported BP’s stock price. BP saw the commencement of six out of seven major upstream projects during the year. For more on this topic, please read Part 2 of this series. BP stock is outperforming SPY in 3Q17 so far.

In the next part, we’ll evaluate BP’s moving averages.

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