BP Share Price is Cruising Above 530p on the Back of Cutbacks by OPEC+

BP share price started the new month on a high note after ending the previous month slightly lower. At press time, the oil giant was trading 4.46% higher at 533.6p. Oil and bank stocks were leading the gains in the UK benchmark FTSE 100 index on Monday, while mining stocks lagged. BP has a total market capitalization of 90.41 billion.

Oil giants are Flashing Green

BP share price was the best performer in UK’s FTSE 100 index on Monday on the back of oil supply cuts by OPEC+. Other European oil and gas giants such as Shell, Total Energies SE, and Galp Energia SGPS SA, among many others. At the time of writing, the FTSE 100 index was moving nearly 1% higher.

The energy sector was flashing green on Monday as markets digested the latest output cut by the Organization of Petroleum Exporting Countries (OPEC). Earlier on Sunday, OPEC+ announced that it would be slashing its output by 1.16 million barrels per day starting May 2023. The announcement saw oil prices surge, recovering from the losses experienced in the past month.

At the time of writing, US West Texas Intermediate (WTI) crude futures had climbed 5.72% to $80 per barrel, while Brent crude futures soared 5.61% to $84.40 per barrel. On the other hand, natural gas futures slumped by more than 6%.

According to Saudi Arabia, the voluntary cuts were a precautionary measure in efforts toward stabilizing the oil market. The OPEC kingpin pledged a cut of 500,000 barrels per day, lasting till the end of 2023, while the UAE announced a slash of 144,000 barrels per day in its output. Other member states, including Algeria, Kuwait, Oman, Iraq, and Kazakhstan, have also announced cutbacks.

The move by OPEC+ comes on the back of Russia’s decision to hack oil production by 500,000 barrels per day until the end of this year. As such, oil prices are likely to continue moving higher as cutbacks in oil production tend to make oil a hot commodity. Notably, oil and gas stocks tend to perform well against the backdrop of surging oil prices.

BP Share Price Analysis

BP share price has been on a slow but steady recovery in the past few days, rising 7.13% in the past week. Even so, the stock remains below the crucial resistance of 571p. On the daily chart, the stock has managed to move above the 25-day and 50-day moving averages, as well as the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has moved higher into the neutral zone.

Therefore, with the rise in oil prices, the BP share price is likely to edge higher as buyers eye the next resistance levels at 550p and 571p. On the flip side, a move below the key support level at 505p could push the price lower to find support at 473.80p.

BP Price Chart

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