BP Plunges 1.9% Amid $5 Billion Green Energy Writedown and Oil Market Turmoil: What’s Next for the Energy Giant?

Summary
• BP announces up to $5 billion in green energy writedowns, signaling a strategic pivot to fossil fuels.
• Intraday price drops 1.9% to $35.135, with a 52-week low of $25.2249 looming.
• Oil prices face downward pressure amid oversupply fears and geopolitical shifts.
• Meg O’Neill’s appointment as CEO adds uncertainty ahead of February earnings.

BP’s shares are under fire as the energy giant accelerates its retreat from renewables, announces steep asset writedowns, and navigates a volatile oil market. With a 1.9% intraday decline and a 52-week low in sight, investors are bracing for a pivotal period as the company’s new leadership prepares to take the helm.

Green Energy Writedowns and Oil Price Pressures Fuel BP’s Sharp Decline
BP’s 1.9% intraday drop is driven by a $4–5 billion writedown on its green energy and low-carbon divisions, announced as part of a strategic refocus on fossil fuels. The company cited weak performance in its transition businesses, including canceled hydrogen projects and stalled solar ventures, as reasons for the impairment. Simultaneously, BP flagged weaker oil trading results and a 63.73 average Brent crude price in Q4 2025—a 7.7% decline from the prior quarter. These factors, combined with broader market fears of an oil glut and Trump-era geopolitical risks, have eroded investor confidence ahead of Meg O’Neill’s leadership transition in April.

Oil & Gas Sector Volatility: BP Trails Sector Leader Exxon Mobil’s -0.4% Move
While BP’s shares fell 1.9%, the broader oil and gas sector showed mixed signals. Exxon Mobil (XOM), the sector’s top performer, declined 0.4%, reflecting broader market jitters over oversupply and geopolitical risks. Shell and TotalEnergies also signaled weaker Q4 results, with Shell halting a North Sea gas asset sale due to shifting market conditions. BP’s sharper decline highlights its unique challenges: a heavy writedown on renewables, debt reduction efforts, and leadership uncertainty underpin its underperformance relative to peers.

Options and ETF Strategies for Navigating BP’s Volatile Outlook
• MACD: -0.075 (bearish divergence from signal line -0.208)
• RSI: 59.12 (neutral, but below 60 suggests potential for further downside)
• Bollinger Bands: Price at 35.135 (near lower band 33.057, indicating oversold territory)
• 200D MA: 32.78 (price above 200D MA, but weak momentum)
• Support/Resistance: Key support at 34.25–34.33; resistance at 33.75–33.98

BP’s technicals suggest a bearish near-term bias, with RSI and MACD signaling potential for a test of the 52-week low. The options chain offers two high-conviction plays: BP20260123P34.5 (put option) and BP20260123C35.5 (call option).

BP20260123P34.5 (Put Option):
• Strike: $34.50 | Expiration: 2026-01-23 | IV: 27.42% (moderate)
• Delta: -0.303 (moderate sensitivity to price moves)
• Theta: -0.0424 (high time decay, favorable for short-term bearish bets)
• Gamma: 0.2300 (high sensitivity to price acceleration)
• Turnover: $522 (moderate liquidity)
• Leverage Ratio: 117.50% (high reward potential)
• Payoff at 5% Downside (33.38): $1.12 per contract (31.7% gain).
This put option is ideal for capitalizing on a potential breakdown below $34.50, with high gamma and theta amplifying returns if the move accelerates.

BP20260123C35.5 (Call Option):
• Strike: $35.50 | Expiration: 2026-01-23 | IV: 23.48% (moderate)
• Delta: 0.428 (moderate bullish exposure)
• Theta: -0.0062 (low time decay, suitable for a rebound scenario)
• Gamma: 0.3015 (high sensitivity to upward price swings)
• Turnover: $3,280 (strong liquidity)
• Leverage Ratio: 88.12% (balanced risk/reward)
• Payoff at 5% Downside (33.38): $0 (no gain).
While the call option is less favorable in a bearish scenario, it offers a hedge if the stock stabilizes or rebounds above $35.50. Aggressive bulls may consider this for a short-term bounce.

Action Insight: Short-term bearish momentum favors BP20260123P34.5 for a 5% downside target. If the stock breaks below $34.50, this put could deliver a 30%+ return. For a bullish rebound, BP20260123C35.5 offers a low-cost entry if the 34.25 support holds.

Backtest BP Stock Performance
BP has experienced a total of 466 intraday plunges of -2% or more since 2022. The backtest results show that the 3-day win rate is 56.01%, the 10-day win rate is 54.29%, and the 30-day win rate is 57.08%. The maximum return during the backtest period was 2.08%, which occurred on day 57 after the plunge.

BP at a Crossroads: Watch for $34.50 Breakdown or Leadership-Driven Rebound
BP’s 1.9% decline underscores a critical juncture for the energy giant as it balances green energy retreats, oil market headwinds, and leadership transitions. The $34.50 level is a key inflection point: a breakdown could accelerate the 52-week low test, while a rebound above 34.25 may stabilize the stock ahead of Meg O’Neill’s April takeover. Investors should monitor the BP20260123P34.5 put for bearish momentum and the BP20260123C35.5 call for a potential short-term rebound. Meanwhile, sector leader Exxon Mobil (XOM) at -0.4% highlights the broader market’s fragility. Act now: Position for a $34.50 breakdown or a leadership-driven rebound by 2026-01-23.