BP share price has been among the worst-performing stocks in the European stock market and UK’s FTSE 100 index. The company’s shares have crashed by nearly 13% in the past week, pulling back its year-to-date price. The BP stock ended its previous trading session 8.29% lower at 486.8p.
Oil and Gas Stocks are Falling.
BP share price has been on a steep decline for the past few days as SVB’s contagion fears continue to rattle markets. Oil and gas stocks have been among the worst-hit stocks as oil prices react to the collapse of the Silicon Valley Bank, which has been weighing on the minds of investors.
Experts believe that a banking collapse could lead to a sustained economic downturn, leading to a slowdown in demand for oil. Even so, some analysts say that investors should not be too worried since there is optimism about oil demand for the second half of the year as China emerges from lockdown.
The latest data by the Organization of the Petroleum Exporting Countries (OPEC) confirmed that the oil demand will increase by 2.3% in 2023. As such, OPEC raised its forecast for the growth of Chinese crude oil demand this year amid the easing of the country’s lockdown restrictions.
The natural resources market has been volatile for the past few days, with Brent crude and Werst Texas Intermediate (WTI) falling 4-5%. Earlier on Monday, the two benchmarks slipped to their lowest price levels since early January and December, respectively. At the time of writing, Brent crude futures were trading 1.14% higher at $74.50 per barrel. US West Texas Intermediate crude futures were up by 0.96%, trading at $68.25 per barrel.
BP Share Price Forecast
The daily chart shows that the BP share price has been on a downward trajectory for the past few days amid the SVB fallout. The stock has been hovering below the important level of 505p in the past 24 hours. BP stock price is moving below the 25-day and 50-day moving averages, while its RSI stands at 31. It is also trading below and above the 50-day and 200-day exponential moving averages, respectively.
Therefore, the BP share price is likely to extend its recent bearish trend as bank contagion fears continue to clatter markets. If this happens, the next support levels to watch will be 466p and 429p. However, a move past the important level of 505p will invalidate my bearish thesis.