Why BP’s Short Interest Has Fallen



Short interest in BP

Previously, we reviewed changes in institutional holdings in BP (BP). In this part, we’ll look at BP’s short interest.

BP’s short interest (percentage of outstanding shares) has fallen from 0.24% in mid-April to 0.16%, suggesting that bearishness toward the stock has reduced. During the same period, BP’s stock price has risen 10%.

Article continues below advertisement

Why the change in sentiment?

BP’s fall in short interest could be due to better markets and higher oil prices. Since mid-April, WTI prices have risen 7%. Oil prices are important for integrated energy companies, as they are the main determinant of upstream earnings. The SPDR S&P 500 ETF (SPY) has risen 3% in the second quarter.

Since mid-April, BP has announced significant upstream project updates, as we’ve discussed in this series. These updates may have boosted positive sentiment toward BP.

Peers’ short interest

Since mid-April, peers Total (TOT), Equinor (EQNR) (formerly known as Statoil), and Petrobras (PBR) have also witnessed a rise in their short interest, by 0.03%, 0.07%, and 0.05%, respectively, to 0.05%, 0.11%, and 0.87%. Their stock prices have risen 11%, 7%, and 14%, respectively. In the next part, we’ll compare BP’s and peers’ valuation.


More From Market Realist