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Has Short Interest in BP Risen?

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Dec. 4 2020, Updated 10:50 a.m. ET

Short interest in BP

In the previous part of this series, we looked at changes in institutional holdings in BP (BP). Now let’s look at changes in its interest.

Short interest (a percentage of outstanding shares) in BP has risen marginally from 0.115% on July 2 (the beginning of the current quarter) to the current level of 0.125%. That usually shows that the bearish sentiment for the stock has increased. During the same period, BP stock has fallen 7%.

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Why the change in sentiment?

In the current quarter, WTI, the benchmark crude oil, has fallen 11%. Oil prices are very relevant for integrated energy companies since they are the primary determinant of the company’s upstream earnings. Thus, the fall in oil could have resulted in a build-up of short interest in BP stock.

However, the rise was marginally due to other events that positively impacted the stock. In the same period, BP posted robust second-quarter earnings, which surpassed the estimates. The company also announced an important upstream projects update, including the Shah Deniz Phase 2.

Peers’ short interest

BP’s peers Total (TOT), YPF (YPF), and Eni (E) have also seen a rise in their short interests by 0.05%, 0.16%, and 0.01%, respectively, since July 2. Currently, TOT, YPF, and E have short interests of 0.10%, 0.31%, and 0.02%, respectively. During the same period, YPF has risen 13%, but TOT and E have both fallen 1%.

In the next part, we’ll see if BP’s valuation has risen.

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