BP share price upward momentum has receded as the excitement around its rumoured takeover cools down. The stock has declined by 3% in the last five sessions, but is still up by 11% for the month. It traded at 366p at press time, down by 1.4% on the daily chart, underlining the current bearish control.
The company is angling for a major change in the coming days, as Elliott Management pushes to replace departing board chairman, Helge Lund. The new chair is expected to steer the company’s board away from the failed green energy sojourn. BP’s recent struggles have been partly attributed to its focus on green energy integration, which failed to pay off.
Elliott Management is not only keen on streamlining the company’s core oil and gas business, but also wants to reduce operation costs substantially. The investment management firm, which owns a 5% stake in BP, wants to cut spending by $13 billion to $15 billion annually to reach $12 billion. That will also involve selling some of the company’s assets to reduce debt burden and increase cash flow to $20 billion by 2027.
BP share price momentum was recently propelled by the rumoured takeover interest by rivals such as Shell, Chevron, Exxon Mobil. However, that factor is fading out of play in the absence of a definitive confirmation from any of the companies. With global crude oil prices down by 14% year-to-date and at -1.02% in the last month, BP share price is likely to assume a sharper downward gradient in the near-term.
BP Share Price Prediction
On the chart below, BP share price momentum calls for further downside below 371p. The first support will likely be established at 364p. Breaking below that level will clear the path for an extended decline to test 361p.
Alternatively, the stock could break above 371p and shift the momentum to the upside. If that happens, initial resistance will likely be at $374. Breaking above that level will invalidate the downside. Also, the resulting momentum could push the price higher to test $378.
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