Is the BP share price a buy after oil prices soar?

The UK-based oil and gas major has seen its share price climb more than 5% since the start of the new year, with the stock capable of climbing even higher, according to Goldman Sachs.

BP has seen its share price climb more than 5% since the start of the new year, with the stock trading at £5 a share as of 15:35 GMT on Tuesday.

The gains the stock has seen are largely due to a surge in oil prices, driven by rising tensions in the Middle-East.

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Goldman Sachs upgrades share price outlook for BP

Analysts at Goldman Sachs are upbeat about the stock, reiterating its ‘conviction buy’ rating and upgrading its target price to £7.50.

Based on the stock trading at £5 a share, analysts at the US-based investment bank believe that the stock has a potential upside of 50%.

BP is set to unveil its fourth quarter results on February 4.

You can go long or short BP with IG using derivatives like CFDs.

Oil prices top $70 a barrel amid rising US-Iran tensions

Oil prices broke above $70 a barrel on Monday, with the rise in the cost of crude driven by rising tensions in the Middle East following the recent US airstrike that killed Iran’s top military commander Qasem Soleimani.

If Iran do choose to retaliate it will disrupt global oil supplies and could push the price of commodity even higher, with around a fifth of global oil supplies flowing through the Strait of Hormuz, a shipping lane that runs between Oman and Iran.

However, oil prices retreated slightly on Tuesday despite rising tensions in the Middle East, with Brent Crude trading at $68.33 a barrel as of 15:35 GMT.

Analysts from Goldman Sachs and UBS poured water on the idea that oil prices will rally above the $70 benchmark, with both banks arguing that strong production from the US and Norway would help support global oil supplies and keep prices from soaring much higher.

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