The moderating global growth story from trade tantrums, primarily between the U.S. and China, have kept a lid on the fortunes many of the Super Major oil companies through the second quarter. BP, (NYSE:BP) is no exception here, having declined about 7% from its early April peak of $45.23/sh to $42ish.
There was a time in late May where it looked like it might crack $40 on the downside, but that never happened. I imagine due to yield hungry investors looking for income, swooping in and gathering up its shares for a 6%+ yield on cost. Shares have rebounded above $42.00 since as a result. As we move into the latter part of the second quarter, I think we may see that magical 6% yield return, and think investors should take a close look at this company.
The oil market is being driven by two things primarily at this point, trade and oil inventory growth. I expect these will continue to dominate the water cooler discussions, with only the increasingly remote chance of a shooting war with Iran, to change that dynamic. Shares of BP will fluctuate in the range set over the last six months as a result.
BP is looking past the day-to-day changes in the oil markets and investing for the long term. Both in legacy oil development, and the energy market that is developing for the next decade.
In this article we will review BP's first quarter review the pipeline of new legacy oil and gas projects and highlight some of their growth areas.