SHARE OF THE WEEK: All eyes are on oil giant BP for its results after rival Shell’s record performance
All eyes will be on oil giant BP for its results on Tuesday following a record performance by rival Shell.
With fellow British oilman posting an annual profit of £32bn for 2022, investors are hoping BP can pull off a similar feat.
Despite lower oil and gas prices from a year ago, its shares have risen around 17% since August, with investors predicting that the end of Covid restrictions in China will trigger a surge in demand for the energy-hungry nation.
Low production from sanction-hit Russia, the need for the United States to replenish its oil reserves as well as the apparent reluctance of the OPEC cartel to open the taps further could also play in the company’s favor by maintaining high prices.
But that could be derailed by the threat of a global recession dampening demand.
With that in mind, investors will likely keep an eye on BP’s outlook for the year beyond a strong set of expected results for 2022.
Analysts expect a performance similar to that of Shell, whose annual profit has more than doubled.
Attention will be on BP’s UK tax bill and how much to pay this year after Chancellor Jeremy Hunt raised the North Sea Windfall Profits Tax to 35% from 25%, bringing the total load to 75%.
And climate-conscious analysts will be seeking comments on a renewable energy strategy following reports earlier this week that BP is considering scaling back its green commitments in favor of cashing in on soaring fossil fuel prices. .
But such a move is likely to increase pressure on politicians to rein in the industry. The shares rose 1.5%, or 7.25p, to 486.05p.