Is BP likely to fall?

Fuel Prices are finally falling at the Pump

OPEC has been trying, in vain, to shore up the oil price through production cuts. Despite their efforts the oil price continues to slide lower. Why?

Industrial global demand is not as strong as headlines would have you believe, with many countries in or knocking on the door of a recession.

Without the demands of a healthy global economy the falling oil price reflects the lack of industrial usage of oil to drive respective plant and operations. Consumers are faced with the ever increasing possibility that jobs may be cut in accordance with poor order books at factories.

Discretionary spending on luxuries and products has had to make way for the essentials in life, fuel travel costs to and from work being one of those, while people do still have jobs to go to. High prices at the pumps have definitely curtailed available cash to fritter away on niceties, thus creating the deflationary spiral.

All of this runs contrary to oil being perceived as inflationary. Sure enough inflation is the short term perception with factories trying to preserve their margins by raising prices of goods sold, but that in itself reduces spending ability of customers, especially when wage rises fail to compensate for the rises.

Where does that leave the likes of BP?

Chasing the falling oil price with lower prices at the pumps, looking for the point that consumers have sufficient spare cash to reverse consumer spending habits. Reversal of this downward spiral may be some way off yet, leaving 7 fat cows running out of food, thereby becoming 7 thin cows.

To see a copy of my report, which includes downward projections on BP email me at asking for the BP report and I will happily send this to you.