BP share price has started the new month on a higher note, erasing losses from its previous trading sessions. At the time of writing, the BP stock price was trading 2.70% higher at 470.70p. The sock has gained nearly 3% over the past week but remains 2.20% lower in the year to date.
BP share price was in the green earlier on Monday as oil prices staged a significant recovery in London’s trading session. Major European oil and gas giants, including Shell Plc, were also trading higher. At press time, Shell share price was trading 2% higher at 2,390p.
Oil prices rebounded during the European trading session after dropping in Asian trade earlier on Monday. Brent crude futures were up by 1% to trade at $76.15 per barrel, while West Texas Intermediate (WTI) crude futures increased by more than 1% to $71.40 per barrel. Even so, global macroeconomic headwinds, as well as uncertainty around the Fed’s interest rate path, have continued to offset forecasts of tighter supplies amid output cuts by the OPEC+.
Data released on Friday showed that the Fed’s favorite inflation gauge rose 0.3% in May, down from 0.4% in April. The Personal Consumption Expenditures (PCE) index, a number closely watched by the Federal Reserve, came in 0.1% higher to 4.7%, compared to a year ago. Despite the easing in inflation pressures in May, the US inflation is still outpacing the central bank’s 2% target, stoking expectations of an interest rate hike in July.
Last week, Federal Reserve Chair Jerome Powell said that he expects multiple interest rate hikes and possibly at an aggressive rate. The FOMC’s latest meeting minutes indicated the likelihood of two interest rate hikes this year with one to be implemented this month. Other central banks, including the Bank of Japan, the Bank of England, and the European Central Bank, have also stressed the need for further hikes.
BP Share Price Outlook
The daily chart shows that the BP share price has been under intense pressure for the past few days amid macroeconomic headwinds. The BP stock price has been at a death cross for the past few days and has continued moving below the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has moved higher into the neutral zone.
Therefore, the BP share price is likely to drop lower in the immediate time before a bullish price reversal. If this happens, the next support level to watch will be at 464.30p. However, a move above the resistance level at 483.20p will give more room for a bullish price correction.