BP Share Price Could Gain 33% to 375p in the Near Term

Summary:

BP share price has the potential to rally by more than 33% in the near term according to the daily chart as the price of oil continues to rise

BP share price is up by more than 2% as the price of crude oil continues to rally and as confidence on global recovery gains steam. The shares are trading at 280.60p and are among the most active in London. At the same time, Shell share price is also up by more than 1.50%.

What’s moving BP share price today? There are three primary reason why BP shares are rising. First, in the United States, the FDA gave its go-ahead for Pfizer and BioNTech’s vaccine, opening doors for a global roll-out. This is a positive thing for BP and other energy companies because it increases the possibility of higher demand.

Second, BP shares are rising because of the recent rally in crude oil prices. At the time of writing, Brent is up by more than 1% and is trading at $50.40 while WTI is up by 0.70%. This is also a good thing for BP and other oil producers.

It is also a good thing for BP shares since traders have now started pricing-in a dividend hike in 2021. Indeed, in a recent note, analysts at Barclays said they expect the shares to jump by about 50% in the coming year.

Third, BP is rising as traders react to the possibility of a deal between the UK and the European Union. The two sides agreed to extend the negotiations without any deadline, meaning that there is a possibility of a deal.

BP Share Price technical outlook

What next for BP share price? BP shares are trading at 280.60p, which is 50% above the YTD low of 188p, which it tested in October. On the daily chart, the price has already moved above the 50-day EMA and is just 20 points below the 200-day EMA. This raises the possibility of a golden cross happening soon. This is when the two averages make a crossover.

Therefore, in the near-term, I suspect that the upward trend will continue as bulls aim for the resistance at 375p, which is about 33% upside above the current level. It is also the highest level since June this year.