BP PLC is a UK oil company. High oil prices will benefit the company very much as they?ll operate on higher profit margins.

Overview

BP PLC (LSE:BP) is a UK based oil company. It is one of the biggest companies in the UK and has a weighting on the FTSE 100 of around 3.52%. Given the high price of oil, BP is currently benefitting from this with increased profit margins. It looks as though Oil could continue higher towards $100 and further.

Financials

From a financial aspect BP is in a very strong position coming out of the pandemic. Total market cap is £77.8bn with 2021 revenue at £157.7bn and a profit after tax of £8.5bn. While these numbers are solid, in 2020 BP lost a whopping £20.7bn. So this profit is needed in order for the company to recover. Looking at the balance sheet, cash on hand sits at £30.6bn with total assets at £287.3bn. Total liabilities sit at £196.8bn, leaving BP net positive £90.5bn

Technicals

From a technical aspect BP is in a clear uptrend. RSI reads 66, suggesting high but not overbought conditions. Looking to the upside, initial targets are £4.50, followed by £5.05 and then £5.85. Towards to downside, support sits at the trendline at £3.55. A break below here further support Sits at £3.22 and then £3.00.

Summary

The company will follow the price of oil carefully and given that oil is pushing towards $100, BP may continue higher. It still has a loss to make up of about £11.5bn, but this year it could do that if the market says strong. In 2019 oil sat at around $65 per barrel and BP also sat at around the £5.00 mark. So long as oil can stay high, oil and the general energy markets may do well in 2022.  BP will be in the sector to ensure they benefit from this.