BP Surges 3.7%—What's Driving the Rally?

• BP shares surge to $32.70, up 3.7% intraday, after Q2 updates highlight refining margin jumps despite oil price slumps.
• Company flags $1.5B potential impairments but markets focus on oil trading gains and operational resilience.
• 52-week range holds at $25.22–$35.83, with current price near $32.70 after opening at $32.06.

Brent crude’s Q2 average slump to $67.88/barrel pressured upstream divisions, yet BP’s shares climbed as traders bet on strategic shifts in oil trading and refining efficiencies. The move contrasts with sector peers like ExxonMobil’s muted 0.35% gain, signaling BP’s unique narrative traction.

BP's Q2 Update Boosts Optimism Amid Oil Price Headwinds
BP’s shares rallied 3.7% as traders embraced the company’s ability to offset falling oil prices through stronger oil trading and a 40% jump in refining margins. Despite warning of $800M lower oil division profits and $300M weaker gas performance, the market focused on operational pivots: increased U.S. shale output, asset sales progress toward $20B by 2027, and resilient trading divisions countering macro headwinds. Analysts noted the stock’s rebound reflects reduced ‘takeover speculation’ risks as BP demonstrates execution credibility.

Oil Sector Mixed as India-Russia Crude Trade Shifts Demand Dynamics
While BP outperforms the sector, broader oil & gas stocks remain range-bound. India’s $2.8B July crude imports from Russia—now 40% of its total—signal shifting supply chains, but BP’s move stems from internal operational updates rather than sector-wide trends. ExxonMobil’s 0.35% gain underscores the sector’s cautious tone, with traders prioritizing company-specific catalysts over macro crude dynamics.

Technical Bullishness and Top Call Options for the Rally
• 200-day MA: $30.70 (current price $32.70, well above support)
• RSI: 53.06 (neutral, below overbought 70)
• Bollinger Bands: Within upper band ($31.97–$29.70), signaling strong momentum.

Bulls target $33 resistance (psychological round number) with a mid-term $35.83 (52W high) ceiling. Aggressive traders can use BP’s $32.70 level to fade dips toward $31.52 (previous close). For options:

1. BP20250718C33.5 (Call, Strike $33.50)
- IV Ratio: 23.23%, Leverage: 192.62%, Delta: 0.256
- Theta: -0.0044, Gamma: 0.285
- Why?: High volume (17,400 contracts) ensures liquidity. A $34.33 price (5% rise) yields $880 max profit ($34.33-$33.50)100 shares minus premium.

2. BP20250718C34 (Call, Strike $34.00)
- IV Ratio: 25.19%, Leverage: 327.45%, Delta: 0.159
- Theta: -0.0072, Gamma: 0.198
- Why?: 400% price surge (from $0) highlights speculative demand. A $34.33 close nets $330 profit ($34.33-$34.00)100.

Trade Hook: Fade dips below $32.50 with BP20250718C33.5; aggressive bulls target $34 calls for a $35+ breakout.

Backtest BP Stock Performance
After an intraday surge of 4% for BP, the stock has historically shown positive short-to-medium-term gains. The backtest data indicates that the 3-day win rate is 51.43%, the 10-day win rate is 50.96%, and the 30-day win rate is 52.55%. This suggests that BP tends to maintain a majority of positive returns in the immediate aftermath of such a significant intraday move.

Hold or Sell? BP’s $33 Resistance Crucial for Momentum
BP’s rally hinges on sustaining momentum above $33. A break below $31.52 risks reversing the narrative, while a close above $35.83 would signal renewed bullishness. Traders should monitor ExxonMobil’s (XOM) 0.35% sector leadership as a gauge of broader oil demand sentiment. Action: Use $32.50 as a stop for bullish positions—failure there signals profit-taking ahead of August’s earnings report.