Why BP Stock Is on the Rise This Quarter



BP stock performance

BP (BP) stock has risen by 5.9% in 4Q17 so far. Total (TOT) and Statoil (STO) have risen by 2.2% and 0.7%, respectively, during this timeframe. Also, PetroChina (PTR) has risen 7.8% in 4Q17 so far. Moreover, the SPDR S&P 500 ETF (SPY) and the SPDR Dow Jones Industrial Average ETF (DIA) rose 5.9% and 9.8%, respectively, in 4Q17 quarter-to-date.

WTI rises in 4Q17 so far

Overall, in 2017, year-to-date, WTI prices have risen 9.8%. However, crude oil prices surged 13.6% in 4Q17 so far. WTI prices have been rising since September. The increase in oil prices is on the back of reducing global supplies. This is mainly due to the production cuts carried out by the major oil-producing nations. The cuts have been in effect for over nine months now. Plus, OPEC decided to extend the cuts until December 2018 at its meeting on November 30, 2017. For more on the likely direction of oil prices, please read Why Oil Prices May Fall in 2018?

BP stock also rises

The increase in oil prices has supported BP stock in 4Q17. Plus, BP posted strong 3Q17 numbers. BP’s adjusted EPS (or earnings per ADS) stood at $0.56 compared to its estimated EPS of $0.49, surpassing analysts’ estimate. Also, BP’s 3Q17 adjusted EPS was 93% higher than its 3Q16 adjusted EPS. For more on this, please refer to BP’s 3Q17 Earnings Beat Estimates, Stock Rises 3%.

Plus, BP saw started up seven major upstream projects in the year according to schedule and under budget. In fact, the last mega project, Zohr, in offshore Egypt started production just a few days back. For more on this, please refer to the first two parts of the series.

Overall, better oil prices, strong 3Q17 numbers, and the start-up of mega upstream projects are possible reasons why BP stock could rise in the current quarter.

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

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