BP,Shel,CVX: Oil Stocks Rise Despite ‘Bloated' Supply Threatening Prices
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The price of Brent Crude was down around 1.3% in mid-trading after a warning from the International Energy Agency (IEA) that OPEC nations like Saudi Arabia were ready to switch on the taps despite weakening global demand.
Oil Collision
The IEA warned that this supply and demand imbalance would collide in the last three months of the year hurting prices. Despite this, the BP (BP) share price rose 0.13%, Shell (SHEL) was up 0.55% and Chevron (CVX), was also up 0.5%.
The IEA cut its forecast for global demand growth this year to 680,000 barrels a day. This is a third lower than its prediction in January this year and the weakest pace since 2009 apart from the Covid 2019 slump.
The main issue with demand is the continued global geopolitical uncertainty and it is particularly notable in China, India and Brazil. All three of these countries, of course, are in the firing line for hefty tariff hikes from President Trump.
This weakening in appetite comes as the OPEC oil cartel looks to lift production. The IEA forecasts that supply will grow by 2.5 million barrels a day this year, a third higher than previous estimations.
As can be seen above this uncertainty has led to huge volatility in the oil price this year.
Supply Puzzle
OPEC, however, made its own predictions today – and they didn't match those from the IEA. It believes that oil demand will climb by 1.38 million barrels of oil a day in 2026, double the forecast from the IEA.
There is also added confusion given figures from U.S. Energy Information Administration, which suggests that over 300 million barrels of oil have been put into storage so far this year, with the IEA declaring that it is actually 225 million barrels.
Analysts warn this uncertainty is making it harder to fully price in the impact of oversupply making the sector even more tricky for investors.
'The peak of the supply glut will be at the end of 2026, according to the IEA, which could keep a lid on the oil price for the long term,' said Kathleen Brooks of XTB. 'The discussions between President Trump and President Putin on Friday could also be weighing on the oil price. If they do find a solution to the war in Ukraine, then it could exacerbate the supply glut even further, and the bias could be to the downside for the oil price as we lead up to the talks.'
Is BP a Good Stock to Buy Now?
On TipRanks, BP has a Moderate Buy consensus based on 4 Buy and 6 Hold ratings. Its highest price target is $40. BP stock's consensus price target is $34.75, implying a 2% upside.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
7 minutes ago
- CNBC
Trump warned by top Senate Democrats to rethink advanced AI chip sales to China
Six Senate Democrats on Friday released an open letter asking President Donald Trump to reconsider his decision to allow tech giants Nvidia and Advanced Micro Devices to sell AI semiconductor chips to China in exchange for 15% of revenue from the sales. The letter — signed by Senators Chuck Schumer, D-N.Y.; Mark Warner, D-Va.; Jack Reed, D-R.I.; Jeanne Shaheen, D-N.H.; Christopher Coons, D-Del.; and Elizabeth Warren, D-Mass. — was in response to an Aug. 11 announcement by Trump that Nvidia and AMD would pay the U.S. government a 15% cut of revenue from chip sales to China in exchange for export licenses. "Our national security and military readiness relies upon American innovators inventing and producing the best technology in the world, and in maintaining that qualitative advantage in sensitive domains. The United States has historically been successful in maintaining and building that advantage because of, in part, our ability to deny adversaries access to those technologies," the letter states. "The willingness displayed in this arrangement to 'negotiate' away America's competitive edge that is key to our national security in exchange for what is, in effect, a commission on a sale of AI-enabling technology to our main global competitor, is cause for serious alarm," the letter continues. Senators also warned that selling advanced AI chips — specifically Nvidia's H20 and AMD's MI308 chips — to China could help strengthen its military systems, a claim that Nvidia denies. In a statement to CNBC, a Nvidia spokesperson said: "The H20 would not enhance anyone's military capabilities, but would have helped America attract the support of developers worldwide and win the AI race. Banning the H20 cost American taxpayers billions of dollars, without any benefit." The letter from Senate Democrats also requests a detailed response from the administration by Friday, Aug. 22, regarding the current deal involving Nvidia and AMD, as well as any similar arrangements being made with other companies. "We again urge your administration to quickly reverse course and abandon this reckless plan to trade away U.S. technology leadership," the letter states. A request for comment from the White House and AMD was not immediately returned. Despite Trump allowing chip sales to resume, it has already become clear that China isn't welcoming Nvidia back with open arms, instead urging tech companies to avoid buying U.S. companies' chips, according to a Bloomberg report. "We're hearing that this is a hard mandate, and that [authorities are actually] stopping additional orders of H20s for some companies," Qingyuan Lin, a senior analyst covering China semiconductors at Bernstein, told CNBC. In a separate report, The Information said regulators in China have ordered major tech companies, including ByteDance, Alibaba, and Tencent, to suspend Nvidia chip purchases until a national security review is complete. —
Newsweek
37 minutes ago
- Newsweek
Map Shows Tax Cuts Promised by Trump Administration Across 50 States
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Tax Foundation, a nonpartisan Washington-based think tank, has produced a map forecasting the effects of President Donald Trump's One Big Beautiful Bill Act on taxes across the United States, broken down to the county level. The White House's website reposted the map, noting that the Tax Foundation said Trump's package would "reduce federal taxes on average for individual taxpayers in every state" and create almost 1 million jobs. Newsweek contacted the Tax Foundation for comment on Saturday outside regular office hours. Why It Matters Trump signed his One Big Beautiful Bill, the centerpiece of his economic agenda, into law on July 4 after it narrowly passed both the House and Senate. The Congressional Budget Office has said the legislation will add $2.4 trillion to the U.S. national debt, a forecast that contributed to a falling out between Trump and his previous close confidant Elon Musk. The One Big Beautiful Bill included sweeping tax cuts, reduced spending on Medicaid, and additional funding for the military and border security. It also raised the U.S. debt ceiling by $5 trillion. What To Know On Wednesday, the Tax Foundation published a study forecasting the effects of the One Big Beautiful Bill on taxes paid by the average American on a county-by-county basis between 2026 and 2035. This was accompanied by a map showing the breakdown by county over this period. Two days later, the White House published a news release welcoming the study, which included a screenshot of the Tax Foundation's map taken for 2026. According to the Tax Foundation, the average tax cut per American for 2026 will be $3,752 because of Trump's spending package. This is forecast to fall to $2,505 in 2030 as some measures expire before increasing again to $3,301 in 2035. A map produced by the Tax Foundation showing the effects of President Donald Trump's One Big Beautiful Bill in 2026 on a county-by-county basis. A map produced by the Tax Foundation showing the effects of President Donald Trump's One Big Beautiful Bill in 2026 on a county-by-county basis. Tax Foundation The states forecast to see the largest tax cuts in 2926 are Wyoming ($5,375), Washington ($5,372) and Massachusetts ($5,139). By contrast, the smallest cuts are expected in West Virginia and Mississippi—at $2,503 and $2,401, respectively. In its report, the Tax Foundation described the One Big Beautiful Bill as "the most significant legislative changes to federal tax policy since the 2017 Tax Cuts and Jobs Act," which was passed in Trump's first term. The president's One Big Beautiful Bill contained a number of tax cuts, including extending corporation and income taxes he imposed in the Tax Cuts and Jobs Act. It also raises the cap on state and local tax deductions over the next five years to $40,000 for those making less than $500,000 per year, reduces tax on tips and overtime pay, and phases out some of former President Joe Biden's energy tax credits. The Tax Foundation also projected that the One Big Beautiful Bill would produce about 938,000 jobs "over the long run," including 132,000 in California and 81,000 in Texas. What People Are Saying White House deputy press secretary Anna Kelly said in the news release: "President Trump's One Big Beautiful Bill is the largest, most consequential tax cut on the middle class ever. Now, the Tax Foundation—the leading nonpartisan tax policy nonprofit—confirms that. Between lower inflation, massive investments, and historic tax cuts, all Americans are reaping the benefits of the Trump Economy—and the Golden Age has just begun." What Happens Next While supporters of Trump's One Big Beautiful Bill may be buoyed by the Tax Foundation's report, which suggests it will result in widespread tax reductions and job creation, critics are likely to continue raising concerns about its effects on the national debt and Medicaid cuts.
New York Post
an hour ago
- New York Post
More US tourists visit Canada than Canucks travel to America for first time ever: report
Tourists from the Great White North are giving the US the cold shoulder. In a surprise twist to the ongoing trade war between North American neighbors, July marked the first time ever more Americans road-tripped it to Canada, than vice versa. That month saw 1.8 million US car trips into Canada, compared to 1.7 million Canadian excursions to the Land of the Free, new data from Statistics Canada released Monday found. Cross-border trips between Canada and the US slowed in July, normally the busiest month of the year. Bloomberg via Getty Images Travel in both directions is slumping, however, as trade tensions between the two allies boil over. US visits to its northern neighbor dropped 7.4% from last July — normally the busiest travel month of the year — while Canadian road trips to America nosedived by a staggering 37%. It marked the sixth consecutive month of year-over-year declines in tourism, following President Trump's February announcement that he was implementing tariffs on Canada, while also joking that he planned to make the country the 51st state, which led to Canucks cancelling their US vacations in droves. 1.8 million Americans visited Canada by car in July. AMVShutter – The two countries blew past an Aug. 1 trade-deal deadline and are now locked in a tit-for-tat tariff battle. The US is targeting Canadian goods not covered by the Canada-United States-Mexico Agreement with tariffs of up to 50%, and Canada imposing 25% counter-tariffs on billions of US exports.
