BP Share Price Falls With Oil Prices

The United States rig counts increased for the second straight week, which sent oil prices in the opposite direction, Friday. And this combination, compounded by the strong dollar, weighed on shares of BP p.l.c. (BP), which declined Friday by as much as 2.78% to a session low of $32.12.

Energy Starting to Cool Off

The number of rigs operating in the U.S. fields rose to 328, compared to 325 from the previous week, according to Reuters, citing data compiled by oilfield services firm Baker Hughes Incorporated (BHI). Comparatively, this still marks a drastic decline of almost 50% from the same period a year ago when rig counts reached 635 rigs online. (See also: 3 Reasons Why U.S. Oil Imports Are Rising.)

The U.S. oil prices closed on Friday below $50 per barrel, an important psychological benchmark for the market. Crude oil (West Texas Intermediate) closed Friday at $48.88, down 2.95%, while Brent crude was unchanged, closing at $50.54, according to CNBC.com. But prices are still well off their year lows of around $25 per barrel reached in January.

The pullback in energy didn’t impede BP’s willingness to merge its Norwegian business with a subsidiary of Det Norske Oljeselskap ASA (DETNF). London-based BP said the $1.3 billion joint venture, called Aker BP, will be an all-stock deal that will help the combined company lower operating costs, Reuters reports. Aker will own 40% of the joint venture and will be the main shareholder, while BP will own 30%. Reuters noted that the remaining stake will be held by other shareholders. (See also: BP Strategizes Profits Amid Slumping Oil Prices.)

The Bottom Line

BP stock closed Friday at $32.22, down 2.48%. The shares have risen 3.07% year-to-date, while falling 21% over the past twelve months. This compares with a 2.55% year-to-date rise in the S&P 500 (SPX) index. BP stock has a consensus hold rating and an average analyst 12-month price target of $35.95, implying an 11.48% rise from current levels.

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