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BP share price outlook ahead of Q2 earnings. Is it a buy?

BP (LON: BP) share price has staged a strong recovery in the past few days as investors wait for the company’s financial results. The stock rose to a high of 404.65p, which was about 11% above the lowest level in July. 

BP earnings

BP is a large integrated energy company that produces and sells more than 1.85 million barrels of oil every day. The firm had over $164 billion in revenue in 2021, making it one of the biggest companies in the industry. It has major operations in the Gulf of Mexico, Angola, Azerbaijan, and Australia among others.

BP will be in the spotlight this week as the company publishes its earnings on Tuesday this week. Analysts expect that the company will publish strong results, helped by the soaring oil and gas price. 

In the first quarter, the company recorded an IFRS loss of $20.4 billion because of the divestment of its Russian operations. Excluding these adjustments, the company’s underlying replacement cost profit of $6.2 billion, which was higher than the previous $4.1 billion.

Other oil giants have published strong quarterly results. For example, Shell posted adjusted earnings of over $11.5 billion. As a result, it announced that it will buy another $6 billion worth of shares.

In France, TotalEnergies announced that it made over $9.8 billion profit, which was higher than the $3.8 billion it made in 2021. As a result, it announced a $2 billion share buyback program. 

Meanwhile, in the United States, Chevron and ExxonMobil continued their strong performance. Exxon had a profit of over $17.9 billion, up from $4.1 billion a year earlier. Chevron made a profit of over $11.6 billion. In total, Exxon, Chevron, and Shell made over $46 billion in profits.

BP share price forecast

BP has been a difficult investment in the past few years. The shares have dropped by 11.62% in the past five years while the Vanguard Energy ETF has risen by more than 20% in the same period. On the daily chart, the shares are above the 25-day and 50-day moving averages while the MACD is nearing the neutral point.

BP share price has moved above the ascending trendline shown in purple. Therefore, there is a likelihood that the stock will keep rising as bulls target the key resistance at 425p. In the long-term, however, we believe that Shell is a better investment because of its large market share in the natural gas industry.

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