Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Premier Oil shares could rebound ahead of earnings, Brent price down

The UK-based oil and gas company is set to unveil its half-year results on Thursday 20 August, with analysts from Peel Hunt believing the stock could push higher despite Brent crude turning lower.

Premier Oil is set to unveil its half-year (H1) results on Thursday 20 August, with analysts from Peel Hunt believing the stock could push higher despite Brent crude turning lower this week.

Analysts from Peel Hunt actually upgraded Premier Oil to a ‘buy’ rating and issued a target price of 50p per share ahead of the company’s H1 results, implying a potential upside for the stock of 47%.

For the share price to rebound that strongly, investors will need to see that Premier Oil has made significant progress with reducing the amount of debt on its balance sheet. Investors will also be eager for an update on the company’s acquisitions and related funding.

If Premier Oil can impress investors in its upcoming H1 earnings, its share price could begin to show signs of a recovery. However, with oil prices subdued amid demand and oversupply concerns the UK-based oil and gas company has an uphill battle ahead of it.

Premier Oil is trading at 34p per share at the time of publication, with the stock down 64% year-to-date.

Brent crude oil prices continue to trade below $45 a barrel

The price of oil slipped below $45 a barrel last week and continues to fall on Monday, with the market weighed down by investors concerned about whether demand will rebound amid oversupply and the coronavirus pandemic.

Adding to investors’ concerns, the International Energy Agency (IEA) and the Organisation of Petroleum Exporting Countries (OPEC) slashed their forecasts for oil demand in 2020 last week.

Brent crude is trading 24 cents lower at $44.56 a barrel at the time of publication, while the US West Texas Intermediate (WTI) is down 18 cents to $41.83 a barrel.

Brent crude turning lower, but bullish resurgence looks likely

Brent crude has similarly managed to break through a key resistance level, with price breaking through the $45.26 resistance level to bring about a potential bullish breakout signal, according to Josh Mahony, senior market analyst at IG.

‘From a wider perspective, we continue to create higher lows, and thus the break through this level does signal the potential for another move higher from here,’ Mahony said. ‘It is worthwhile noting that we have recently seen lower highs too, meaning that a break through $45.83 would ultimately be required to signal a wider bullish break coming into play.’

‘Nevertheless, with price heading lower, it looks attractive to buy into this pullback,’ he added. ‘Look out for potential support to come into play around the 61.8% and 76.4% Fibonacci levels. This bullish outlook would be negated with a break below the $44.76 support level.’

How to trade stocks with IG

Looking to trade Premier Oil and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Premier Oil’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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