BP shares could fall due to green targets, Brent crude moves above $45
BP could see its share price come under pressure after it sets ambitious green energy targets and accepts lower returns as it transitions away from fossil fuels, while Brent crude rallies above $45 a barrel on Tuesday.
Shares in BP could trend lower after the company set itself ambitious green energy targets, forcing the oil and gas major to accept lower returns as it transitions away from fossil fuels.
The company plans to become the one of the world’s largest renewable power generators, with it targeting 50 gigawatts of wind, solar and hydropower in its portfolio by 2030.
‘Energy markets are fundamentally changing, shifting towards low carbon, driven by societal expectations, technology and changes in consumer preferences.’ BP chairman Helge Lund said in a statement. ‘And in these transforming markets, bp can compete and create value, based on our skills, experience and relationships.’
‘We are confident that the decisions we have taken and the strategy we are setting out today are right for bp, for our shareholders, and for wider society,’ he added.
The company has also said that it will reset it dividend to a ‘resilient level’ of 5.25 cents per share per quarter, with a commitment to return at least 60% of surplus cash to shareholders through share buybacks, once bp’s balance sheet has been deleveraged and subject to maintaining a strong investment grade credit rating.
BP is trading at 4% higher at 308p per share at the time of publication, with the stock down 35% year-to-date.
Brent crude breaks above $45 a barrel as investors await US relief bill
The price of Brent crude managed to break above the psychological benchmark of $45 a barrel on Tuesday, as investors eagerly await the latest Covid-19 relief bill aimed at propping up the US economy amid the fallout from the pandemic.
Brent crude is trading more than 50 cents higher on Tuesday at $45.50 a barrel at the time of publication, while the US West Texas Intermediate (WTI) is 1.5% higher at $42.60 a barrel.
Oil prices were also supported by news that new coronavirus cases in the US have begun to show signs of slowing down, with America leading the table for the total number of cases worldwide at 5 million.
The total number of Covid-19 cases globally stands at over 20 million, according to data compiled by John Hopkins University.
US treasury secretary Steven Mnuchin said on Monday that the bill could be approved this week, with Republicans pushing for a $1 trillion stimulus package, while Democrats are seeking a relief deal that exceeds $3 trillion.
WTI bounces back
After rebounding on Friday, the WTI price looked like it was struggling to maintain its move higher on Monday.
However, having cleared trendline resistance from last week’s peak the price appears to have mustered up some fresh bullish momentum, breaking above $42.50 and moving higher. But a reversal below $41.50 this week would negate last Friday’s trendline break higher.
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