Why BP plc Short Interest Reached 52-week Low
The article discusses the reasons for the fall in the short interest for BP
The Financial Industry Regulatory Authority revealed the short interest September 15 data last week on Monday September 26. The BP plc short interest position was much favorable as it was able to report 4.74 million shares of short interest. BP short interest declined by approximately 35% in the recent fortnightly period, and reached its 52 week low. The ratio of short interest ratio, which was computed on average daily 10.97 million of volume, increased to 0.43 days from 0.77 days.
The decline in short interest for the London Oil Company comes amongst a reducing crude oil condition. Prices of crude oil have declined significantly since past year. The United States benchmark price for crude oil West Intermediate looks to have grabbed the $45/barrel mark, whereas its corresponding, Brent crude stood in high forties.
In such an environment, low short interest is commendable. The analysts try to determine the reasons for the favorable position of short interest.
BP plc short interest has gone up since June 15. While, the decline this quarter arrives as an irregularity for the company. One of the reasons that might explain the fall is the merger & acquisition speculations prevailing in the market for quite some time. Followed by the huge $18.7 billion penalty imposed on the company, many expect a possible merger for BP.
One more reason for the fall can be the penalty settlement in July between the regulatory authorities and the company. After the oil spill incident in 2010, there were differences between the US authorities and BP. However, a penalty settlement now permits sell side firms to carry out much precise predictions for the London oil company.
With an instant rebound in oil prices instead not likely and company’s disclosure in Russia, the position ahead does not seem quite well for BP.
As per BP stock news, there were 15 analysts covering the stock of BP plc, out of which three suggest it a Buy, while 10 gave it a Hold rating. The 12 month target price estimate for the company stands at $36.38 with approximately 11.9% upside possibility.
Fadel Gheit, an analyst at Oppenheimer & Co. rates BP stock with $45 price target and an Outperform rating. On the other hand, Anish Kapadia an analyst at Tudor Pickering & Co. was bearish on the stock, and gave it a Hold rating with a twelve month price target of $30.
BP stock closed at $32.51 after going up 5.01% on Friday.
