BP shares slump as oil price collapses into negative territory
The oil and gas major will unveil its first quarter results next week, with the stock coming under pressure amid the collapse in oil prices as demand dries up due to the Covid-19 pandemic.
Overnight the price of US crude fell into negative territory, driving down the share price of oil major BP, with it trading 4% lower on Tuesday.
The decline in oil prices is bad news for BP, which is set to unveil its first quarter (Q1) earnings next week, with the company left uncertain about how long commodity pricing will remain depressed or when demand will return.
In a trading update at the start of April, the oil major said that it continues to monitor the impact of the Covid-19 crisis on its global operations and said that while there has been no significant operational impact in Q1, things could change through Q2.
‘At BP we are mobilising in our own way across the BP world, taking action with three clear objectives: protecting our people; supporting the communities where we live and work; and strengthening our finances,’ BP CEO Bernard Looney said.
BP is trading at 288p as of 13:10 (GMT) on Tuesday.
Oil prices collapse amid Covid-19 crisis
The US West Texas Intermediate (WTI) is trading at -$3.70 a barrel, prompting Brent crude to fall as much as 20% to slip below $20 a barrel on Tuesday – its lowest level since 2002.
The collapse of US crude was driven by weakening demand for oil as a result of the Covid-19 pandemic and global storage facilities reaching their limit.
In an interview with Bloomberg, Gerard Paulides CFO at Vopak, the world’s largest oil storage company, explained how all of its space for crude and refined products has run out due to the Covid-19 crisis.
‘The available capacity on the oil side is almost completely sold out for our terminals,’ Paulides said.
‘For Vopak, worldwide available capacity that is not in maintenance is almost all gone and from what I hear elsewhere in the world we’re not the only ones,’ he added.
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