BP p.l.c. engages in the energy business worldwide. It operates through three segments: Upstream, Downstream, and Rosneft. British Petroleum stock forecast: the Upstream segment is involved in the oil and natural gas exploration, field development, and production; midstream transportation, storage, and processing.
British Petroleum is obviously highly correlated with Light Crude Oil and Brent Oil. If Oil is dropping strongly as it’s been doing for several months, British Petroleum and most oil-related stocks will experience short sell-offs since their production costs are the same but the oil barrel is being sold for much fewer dollars.
The collapse in crude oil prices has brought into relief the correlation between oil majors’ financial leverage and the valuation of their shares. It’s a relationship that looks like particularly bad news for the bigger European oil producer firms.
Let’s take a look at British Petroleum weekly timeframe analysis below. You can see a couple of weekly imbalances. The latter, around $35.90 per share is being formed and looks pretty strong. We can see how similar imbalances are a little bit higher, around $38.98, playing out nicely.
As supply and demand traders, we should not care much if Oil plunges after fails to reach a deal or the existing oil wars and fights existing between Opec, Russia, Arab countries and the US. Oil is trading lower after Saudi Arabia slashed crude oil prices. Still, if we look at British Petroleum’s weekly timeframe, we will see that it was the most likely direction the oil-related stock could move since we had a weekly supply in control and a clear downtrend and bearish bias.
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