BP stock formed a horizontal resistanceA horizontal resistance chart pattern is a type of chart which shows how price movement follows a certain pattern when price reaches a certain level. The pattern forms a resistance... breakout chart pattern on September 1, 2023, after the company announced a $1.5 billion share buyback program.

BP p.l.c, also known as British Petroleum, is a multinational oil and gas company headquartered in London, UK. BP operates in all areas of the oil and gas industry, including exploration, production, refining, distribution, and marketing. The company is involved in the exploration and production of oil and natural gas reserves globally, refining crude oil into various products, and distributing these products to retail and commercial customers. BP also has a presence in renewable energy sources such as wind and solar power. Additionally, the company is engaged in the production and marketing of petrochemicals.

BP commences up to $1.5B share buyback program

A share buyback program to repurchase common shares was announced by BP on September 1, 2023. As stated by the company on August 1, the program’s goal is to lower the issued share capital of the company in order to distribute 60% of the surplus cash flowThe cash flow statement provides a detailed overview of the cash inflows and outflows of a company over a specified period of time. It includes cash received from operations, inves... produced in 2023. Up until and including October 27, the program can receive a maximum of about $1.5 billion.

Oil Reaches New 2023 High

As falling inventory levels alarmed the market, the price of a barrel of WTI grade crude oil rose to its highest level this year on September 1, 2023, at $85 per barrel.

WTI crude oil briefly rose to $85 per barrel before falling to $84.90. It was in November 2022, that WTI last reached that high of a price.

The United States’ declining crude oil inventories, which fell by another 10.6 million barrels for the week ending August 25, according to the Energy Information Administration, are a significant contributing factor to the rising price of crude oil.

The OPEC+ alliance, which also includes major players like Saudi Arabia and Russia, is another factor in higher oil prices. Russia has said it will give more information about the agreement it reached with the other party regarding production cuts next week. The likelihood that Saudi Arabia or Russia might broaden or intensify their current production cuts is being considered by the market. More analysts than not anticipate that Saudi Arabia will extend its 1 million bpd production cut into October.

The declining value of the dollar, which makes crude oil more accessible to holders of other currencies and raises demand, serves as a third support for oil prices.

The increase in price will make it more challenging for the Biden Administration to carry on with the agonizingly slow process of replenishing the country’s Strategic Petroleum Reserve, which has been growing by an average of 600,000 barrels per week for the past few weeks after draining 300 million barrels out of the SPR over the last few years.

Despite the 300 million barrels leaving the SPR and entering commercial inventories, crude oil inventories overall—excluding those in the SPR—are still more than 100 million barrels below levels from July 2020.

The OPEC+ Alliance

OPEC+ is an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries. The “+” in the term represents the non-OPEC countries that collaborate with OPEC to stabilize and control global oil prices. The alliance was formed in 2016 as a response to the global oil price crisis. The objective of OPEC+ is to coordinate oil production levels among its members to manage and stabilize the oil market. By collectively adjusting oil production, they aim to influence prices and avoid extreme volatility in the global oil market. The alliance includes OPEC member countries such as Saudi Arabia, Iraq, Iran, and Venezuela, alongside non-OPEC countries like Russia, Kazakhstan, Mexico, and others. Together, they negotiate production quotas and make decisions on the level of oil output to maintain a balance between supply and demand. Regular meetings are held to assess market conditions and make necessary adjustments to production levels. These decisions can have a significant impact on global oil prices, affecting both producers and consumers worldwide. Overall, the OPEC+ alliance serves as a platform for collaboration among major oil-producing nations to stabilize the oil market and ensure a steady flow of supply in line with global demand.