Hi there everybody. Disclaimer: I maintain BP. I might like to indicate you why in two fast graphs (not T.A.)
This can be a graph of BP’s ADR inventory worth. Set it to five years.
This can be a graph of the Brent oil worth. Or as individuals on WSB would in all probability name it, socialism oil. Set it to five years.
Now, take a look on the form of the 2 graphs. Discover how remarkably nicely they observe each other, with a discontinuity in 2020.
The present brent oil worth is over $56 and has been rising.
Even if you happen to had no stimulus, no 0% charges, no background stockmarket bubble occurring, to push costs up usually – utilizing earlier components of the graph, the place would you count on the worth of BP to be, roughly?
The place is it now?
What % acquire would you make if the worth of BP had been to realign with brent because it usually has previously?
Is demand for oil within the coming 12 months post-vaccinations more likely to all of the sudden rise, stay stagnant, or fall? (i.e. what would you count on to occur to the worth of brent within the time taken for a realignment?)
Therefore, I maintain BP. Thanks for studying and for any feedback beneath.