Has Short Interest in BP Risen?

Short interest in BP

Short interest as a percentage of outstanding shares in BP (BP) has risen 0.04 percentage points since the beginning of the third quarter on July 2 to the current level of 0.16%. That implies that bearish sentiment in the stock has increased. Over the same period, BP stock has risen 1.3%.

Has Short Interest in BP Risen?

Why the change in sentiments in BP?

Since July 2, short interest in BP has declined due to volatility in oil prices. The price of Brent crude oil, which has risen steeply in the past month, declined in the early part of the third quarter due to a rise in the global oil supply and concerns over oil demand. Oil prices are vital to integrated energy companies since they directly impact their upstream earnings.

So the fall in oil prices likely led to a steep surge in short interest in BP. However, in the past month, presumably due to the rise in oil prices, short interest in BP has declined marginally. Overall, short interest in BP has risen since July 2.

Peers’ short interest

Short interest in Total (TOT) and Equinor (EQNR) rose 0.04 percentage points and 0.06 percentage points, respectively, since July 2. Currently, TOT and EQNR have short interests of 0.09% and 0.21%, respectively. Since July 2, TOT and EQNR have risen 2.3% and 5.3%, respectively.

Pre-earnings series overview

In this series, we reviewed BP’s earnings estimate and segmental earnings prospects for the third quarter of 2018. We also evaluated BP’s stock performance. Then we calculated the stock price forecast range for a 22-day period leading up to October 30. That was based on its current implied volatility.

In the previous part of the series, we looked at analysts’ ratings for BP before its third-quarter earnings release. We concluded the series with a review of short interest in BP before its third-quarter earnings release.