BP shares hit 26-year low, Brent crude oil price stabilises at $42
The oil and gas major saw its market value fall to £40.5 billion – a 26-year low – amid growing concerns about its future from investors as the coronavirus pandemic continues to weigh on energy demand.
- BP share price falls below 200p level as investor confidence in oil industry waivers
- Brent crude stabilises at $42 a barrel
BP shares have slumped to a 26-year low amid investor concerns about the future of the oil and gas industry which has suffered immensely due the coronavirus pandemic weakening energy demand and causing a collapse in oil prices.
On Thursday, the oil and gas major saw its share price fall below 200p a share for the first time since 1993, driving its market value to £40.5 billion – below that of Danish offshore wind developer Orsted which is valued at £51 billion, highlighting the how renewable energy is outpacing fossil fuels.
Covid-19 continues to take its toll on BP shares
BP’s sliding share price is due to the Covid-19 pandemic eroding energy demand and driving down oil prices in 2020, prompting the oil and gas industry to accelerate their investment in renewables.
‘Our entire sector has experienced similar drops this year, and if anything we feel that in itself is a robust case for change,’ BP CEO Bernard Looney said in a LinkedIn post. ‘As for our strategy, it is a long-term approach, and we believe that we will create more value through this shift than we would if we kept doing what we were doing.’
‘At the end of the day shareholders … want to see us deliver on what we laid out. Words are cheap, actions count. And we are very confident we will deliver,’ he added.
BP closed at 201p per share on Thursday, with the stock down 58% year-to-date.
Brent crude: technical analysis
Brent crude tumbled back into the $41.59-41.78 support level yesterday, with price moving away from the $43.71 resistance level in what could be the beginning of a topping pattern, according to Josh Mahony, senior market analyst at IG.
‘However, we would need to see a break below that lower $41.59 level to spark a fresh move towards the $39 region once again,’ Mahony said.
‘However, until we see that break through support, another short-term rise could be on its way today to continue the consolidation phase that has dominated the past fortnight,’ he added.
Brent crude is trading 79 cents higher at $42.52 at the time of publication on Thursday, while the US West Texas Intermediate (WTI) is up 77 cents at $40.80 a barrel.
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