BP share price forecast as oil and gas prices surge

The BP (LON: BP) share price bullish momentum faded on Wednesday after Vladimir Putin vowed to stabilize gas prices. The stock is trading at 341p, which is a few points below this week’s high of 354p. Still, the shares have jumped by more than 90% from the lowest level since October last year.

Oil prices rally

BP is a large oil and gas company that is involved at all stages. It is an oil and gas explorer, trader, and even commercial seller. 

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The BP share price has benefited substantially from the recent surge in oil and gas prices. Oil rose to a seven-year high of more than $82 per barrel while natural gas has jumped to an all-time high. Analysts expect that the price of gas could keep rising as demand rises ahead of the winter season.

Oil prices have jumped because of the mismatch between demand and supplies. Demand is expected to keep rising in the near term as the world economy rebounds. Indeed, the International Energy Agency (IEA) expects that demand will rise to more than 100.8 million barrels per day in 2022.

Meanwhile, oil supplies are expected to remain under pressure for a while. US shale producers are not pumping oil as fast as they did in the past. Most of them are afraid of investing in growth, which could upset investors.

Meanwhile, OPEC+ members agreed to increase production by just 400k barrels per day per month. This increase is relatively smaller than expected and will likely lead to an imbalance between supplies and demand. 

Therefore, the BP share price has jumped because analysts expect that the company’s revenue and profitability will continue rising in the coming quarters. This will in turn lead to better dividends since the company has already slashed a substantial amount of its debt. 

BP share price forecast

The BP share price declined slightly on Wednesday as oil and gas prices retreated. The stock is trading at 341p, which is slightly above the important support at 332p. This was the highest level in June this year. 

The shares remain above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is moving below the overbought zone. 

Therefore, the BP stock price will remain in a bullish trend as long as it is above the two moving averages. If this happens, the next key resistance to watch will be at 400p.

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