The BP share price broke out on Tuesday as investors reacted to the price of crude of rose to the highest level in more than three years. The stock rose by more than 2% on Tuesday becoming the third best performing stock in the FTSE 100 index after Smiths Group and Royal Dutch Shell. The Tullow Oil share price also rebounded.
Oil and gas prices rose
BP is a leading oil and gas explorer, producer, and trader that has a market capitalisation of more than $90 billion. Like other similar companies, BP does well when the prices of oil and gas is rising.
The price of crude oil has been in a major bullish trend in the past few days as investors price in more demand as the global economy rebounds. Brent, the global benchmark, rose to $80 while the West Texas Intermediate (WTI) rose to more than $76.
Therefore, there is a likelihood that BP will benefit from these trends. Besides, the company’s outlook is for the price of oil to be around $60.
The BP share price is rising as investors predict that the ongoing supply shortage in the UK will ease. The UK, which is one of BP’s biggest market, has pledged to solve the ongoing shortage by bringing in more foreign workers. It has even asked the military to be on standby if the challenge escalates.
BP Share price forecast
The daily chart shows that the BP stock price has been in a consolidation phase recently. The stock had struggled moving above the key resistance level at 332p, which was the highest level in June. It moved above this resistance level today. It remains above the short and longer-term moving averages.
Therefore, the stock will likely continue rising as bulls target the next key resistance level at 350p. A move below the key support at 332p will invalidate this view.