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By Malcolm Stacey | Thursday 9 August 2018
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello, Share Seekers. Having just filled my tank at huge cost, I rather think that the BP (BP.) balance sheet is having a jolly old time. The price of Brent Crude has been dithering lately, due to a surfeit of the black stuff in America. And yet the price at the pumps has soared.
Not that long ago, petrol in Blighty was £1 a litre. In my neck of the woods, which is near massive oil refineries, the price is now £1.33. Yes, taxes won't help, but some of the giant oilers must be raking it in by now.
In my humble view, the price of oil will now resume its breakneck upward trend. And that's because Big Donald has put up the barriers against that mighty oil-finder, Iran. Ok, the USA is not the only customer and has that oil glut of its own, anyway, but if the big sellers of oil can find any excuse to hike the price they will.
Meanwhile, BP has been buying up big-time shale fields in the USA. Its reserves, so important to oilers in case of bad times, must be impressive these days. It has also just upped its dividend. And it hasn't felt confident enough to do that in the last four years. That says a lot.
Also, the divis are paid in dollars. That means we currently make more lolly when the pay-outs are converted into pounds. The yield I have for the whole of 2018 is 5.5%.
Like all the oil majors, BP got a huge shock when oil dropped to 30 dollars a barrel. And like its peers, it has been making efficiencies and cuts ever since. That enabled the Footsie giant to increase profits fourfold in the second quarter of 2018. That's right - four times! What's not to like about that?
If you know, tell me in the Punter's Return.
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