BP shares hit recent high after Q3 earnings beat

(Video Transcript)

BP Q3 results

Oil companies recently have had a really good ride, and it continues this morning as a result of numbers coming in for the third quarter (Q3) from BP.

Let's take a look at the figures as we saw them being delivered this morning. Better than expected third quarter profit of $8.15 billion boosted by very strong natural gas trading. Estimates had been for $6.2 billion for the full-year (FY). BP now expects upstream production to be slightly higher than that of 2021.

The company announced another $2.5 billion in share repurchases and continues to expect to be able to deliver share buybacks around $4 billion per annum.

Share price chart

Let's take a look at the share price chart because this describes exactly what's going on in this sector, that companies are getting more and more profitability coming through.

And we now hear that in addition to the UK government imposing a 25% energy profits levy on North Sea oil and gas producers to raise money to help households struggling to pay the bills, we now hear there's a possibility that's been expanded.

But this doesn't seem to have dented the upward share price movement in today's session. We are currently down half of 1%, but I think you can see on the right hand side of this chart here, we have peaked above recent trading and we have hit 33-month highs for the price of BP. In February next year, there will be three-year highs. So that's where we are for BP, things looking good.

If you're long on this, your stock goes below recent price action. But I think in order to see further higher highs that we've really got to get over this idea that we're going to go into a deep recession and perhaps it might only just be a brushing recession and come out the other side sometime in the first or second quarter of next year. The market can see that. I think there's potentially more upside to go for these oil giants.