BP share price analysis as crude oil prices dip

BP (LON: BP) share price pulled back on Friday as the market reacted to the ongoing crash of crude oil prices and a fire in Ohio. The shares slipped to a low of 443.70p, which was slightly below the year-to-date high of 470p.

Tough week for BP

BP is a leading oil and gas company that has operations in tens of countries around the world. The company has come under pressure this week after an explosion happened at a refinery in Toledo, Ohio. The explosion killed two employees and led to a shutdown in the plant. 

In a statement, BP said that it was still investigating the cause of the fire as it reiterated its support for the two employees. The plant can process about 160k barrels of oil every day. This fire came a few weeks after BP announced that it would sell 50% of the refinery to Cenovus for $300 million.

Therefore, BP will come under scrutiny from regulators who have criticised the company for its safety record. In addition to the repair costs, the company will likely receive a huge fine from American regulators. 

BP has had a difficult performance in the United States. In 2010, an explosion in the Gulf of Mexico killed 11 people. A few years before that, an explosion in Texas killed 15 people. And last month, the company shut down its refinery in Indiana because of an electrical fire.

BP share price has also pulled back due to the falling oil prices. Brent, the global benchmark, saw its price crash to $88 while West Texas Intermediate (WTI) crashed to $80. This decline happened as the US dollar rally continued and as fears of a recession continued.

Still, as I wrote in this article, a strong US dollar could be beneficial for BP and other energy companies like Shell that report in sterling.

BP share price forecast

bp share price

The daily chart shows that the BP stock price has been in a strong bullish trend in the past few months. This bull run faded recently as the stock found a strong resistance at 469p. It has formed a double-top pattern whose neckline is at 360p. The shares have also moved slightly below the 25-day moving average while the RSI has pulled back. 

Therefore, the stock will likely continue falling in the coming days. If this happens, the next key support level to watch will be at 400p.

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