BP share price climbed on Friday amid bullish sentiment in the European stock markets on the back of the successful US debt ceiling bill. The stock was trading more than 2% higher on Friday at 471.10p, erasing some of the losses it made in the past few days. BP has a total market capitalization of £80.575 billion.
Optimism Abound
The European stock market was in the green on Friday as investors digested the approval of the US debt ceiling bill by the Democrat-led Senate. UK’s top equity index, the FTSE 100 index jumped nearly 1%, following closely behind Germany’s DAX index and France’s CAC 40 index. The BP share price was among the best performers in the FTSE 100 index on Friday.
Other energy stocks such as Shell also saw an increase in their share prices as oil prices edged higher. Oil prices surged on Friday amid the bullish sentiment buoyed by the passage of the US debt ceiling bill and the likelihood of price-supportive oil production cuts by the OPCE+ over the weekend. At the time of writing, Brent crude oil had increased by 1.86% to trade at $75.66 per barrel, while the US West Texas Intermediate (WTI) crude oil jumped 1.97% to $71.48 per barrel.
Markets seemed quite optimistic on Friday against the backdrop of the approval of the US debt ceiling bill by Congress, as well as signals of a pause in interest rate hikes by the Federal Reserve in June. On Thursday, the Senate approved the tentative deal made by US President Joe Biden and House Speaker Kevin McCarthy to suspend the US debt ceiling to 2025. The approval came in a few days before the US government entered a default.
Focus has now shifted to the June 4 meeting by the Organization of the Petroleum Exporting Countries and allies (OPEC+), including Russia. Ministers from key oil-producing countries are expected to decide whether to trim output. Further output reductions by OPEC+ will pump liquidity in the oil sector, pushing oil prices higher.
BP Share Price Outlook
The daily chart shows that the BP share price has been under intense pressure for the past few weeks amid increased market volatility. While the BP stock price remains below the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages, all hope is not lost. The stock’s Relative Strength Index (RSI) has moved above the signal line but remains below the neutral zone.
Consequently, further output cuts by OPEC+ will see the BP share price jump higher, prompting an upside price correction. A move past the major resistance level at 494.30p will push the price higher. Conversely, a flip below the crucial support zone at 464.30 will invalidate the bullish thesis.
