BP share price outlook and earnings preview as oil prices jump

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Written on Jul 28, 2023

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European energy companies like TotalEnergies, Eni, and Shell published weaker results.
The companies cited the relatively weak crude oil and gas prices.
BP will publish its quarterly financial results next week.

BP (LON: BP) share price was stuck in a tight range this week even as European oil and gas giants published weaker results. The stock was hovering at 480p on Friday, where it has been in the past few days. It has risen by more than 7.70% from the lowest level this month.

BP earnings preview

Most European energy companies published weak financial results. Eni, the biggest Italian energy company, said that its quarterly net profit came in at €1.9 billion in the second quarter. Earnings almost halved while margins deteriorated.

TotalEnergies revenue and profits dropped as oil prices fell. Its net income came in at over $4.1 billion. The company announced that it was starting commercial drilling for oil in its Uganda location, with production expected to start in 2025. The company will produce 190k barrels per day at its peak.

Meanwhile, Shell said that its profits tumbled by 56% to $5 billion, as we wrote here. The company then decided to boost its buybacks and boost its dividends.

Therefore, analysts believe that BP’s revenue and profits dropped slightly in the second quarter. Precisely, analysts expect that the company’s revenue will be over $54 billion while the earnings per share (EPS) will come in at $1.26. BP’s revenue in Q1 came in at $56 billion.

Still, there is a ray of hope in the energy market since crude oil and gas prices have started rising this year. Brent crude oil jumped to $83.77 while West Texas Intermediate (WTI) rose to $80. At the same time, natural gas prices have jumped to $2.6.

Therefore, while the company’s revenue and profits will likely drop, the recent trends in the energy market will likely boost the stock. Also, the company will likely boost its payouts to investors.

The daily chart shows that the BP stock price formed a bottom at 446p between June and July. A triple-bottom is one of the most accurate bullish sign. The stock has moved slightly below the important resistance level at 491p, the highest level in November.

BP share price has moved above the 50-day and 25-day moving averages and the two are about to make a bullish crossover. Therefore, since the weak results sentiment has already been priced in, there is a possibility that it will soon have a bullish breakout. If this happens, the key level to watch will be at 500p.