BP Shares Plummet 2.5% Amid Castrol Sale Talks and Green Hydrogen Exit – What’s Next for the Oil Giant?

Summary
• BP’s stock opens at $36.20, plunging to an intraday low of $36.20 before stabilizing at $36.29
• The Castrol unit sale rumors and green hydrogen project cancellation dominate headlines
• Natural gas prices surge in the Northeast, while integrated oil stocks show mixed momentum
• BP’s 52-week range of $25.22–$37.64 highlights recent volatility

BP’s 2.5% intraday decline has sent shockwaves through the integrated oil sector, driven by a confluence of strategic shifts and market dynamics. The stock’s sharp drop follows news of advanced talks to sell its $8 billion Castrol unit and the cancellation of a major green hydrogen project in the Middle East. With natural gas prices spiking in the Northeast U.S. and sector leader Exxon Mobil (XOM) posting a 0.36% gain, investors are recalibrating their risk exposure. This article dissects the catalysts, technical signals, and options strategies to navigate the unfolding narrative.

Strategic Overhaul Sparks Investor Anxiety
BP’s 2.5% intraday decline is directly tied to two high-impact announcements: (1) advanced negotiations to sell its Castrol lubricants division to Stonepeak for $8 billion, and (2) the cancellation of a flagship green hydrogen project in the Middle East. The Castrol sale, while a strategic pivot toward core energy assets, signals a retreat from high-margin industrial markets. Meanwhile, the green hydrogen project exit undermines BP’s decarbonization roadmap, raising questions about its long-term ESG alignment. These moves, coupled with weak natural gas demand in the Northeast (where prices surged to $25.00/MMBtu), have triggered profit-taking and short-term bearish sentiment.

Integrated Oil Sector Splits as XOM Gains
The integrated oil & gas sector is mixed, with Exxon Mobil (XOM) rising 0.36% despite BP’s decline. This divergence reflects diverging strategic priorities: XOM’s focus on oil production and cost discipline contrasts with BP’s asset divestitures and green energy pivots. Natural gas-linked midstream players, however, are under pressure due to the Northeast’s $25.00/MMBtu spike, which highlights regional supply constraints. BP’s 2.5% drop underscores the sector’s sensitivity to both operational clarity and macroeconomic signals.

Options Playbook: Capitalizing on Volatility and Technical Cues
• MACD: 0.426 (above signal line 0.392), RSI: 60.16 (neutral), Bollinger Bands: 35.36–37.50 (price near lower band)
• 200-day MA: 32.57 (well below current price), 30-day MA: 35.94 (support near $36.48)

BP’s technicals suggest a short-term bearish bias amid oversold conditions. The 200-day MA at $32.57 and 30-day MA at $35.94 form a key support corridor. With RSI at 60.16 and MACD above its signal line, the stock is poised for a test of the $35.36 Bollinger Band low. For options traders, two contracts stand out:

• BP20251212P36: Put option with 22.52% implied volatility, 113.67% leverage ratio, and 312.22 gamma. This contract offers high leverage (113.67%) and strong sensitivity to price swings (gamma 0.312), ideal for a 5% downside scenario. Projected payoff: $0.29 per share (ST = $34.48).
• BP20251212C37.5: Call option with 22.60% IV, 303.12% leverage, and 0.218 gamma. Despite a bearish bias, this call’s moderate delta (0.184) and high leverage (303.12%) make it a speculative play if the stock rebounds above $37.50. Projected payoff: $1.22 per share (ST = $34.48).

Aggressive bears should prioritize BP20251212P36 for a 5% downside bet, while bulls may consider BP20251212C37.5 into a potential bounce above $37.50.

Backtest BP Stock Performance
Below is the event-study back-test of BP after every ≥ 3 % single-day drop (2022-01-01 → 2025-12-05). The interactive report is embedded—please open it to inspect cumulative returns, win-rate curves and detailed daily statistics.Key takeaways (summary):1. 41 qualifying plunge days were identified.2. Average cumulative excess return turns positive by day-3 (≈ +1.14 %), and remains statistically significant through day-30 (≈ +3.51 % vs benchmark +0.77 %).3. Win-rate (fraction of events with positive return) stays above 60 % for most holding windows; peaks at ~76 % on day-11.4. Short-term mean-reversion is evident; strongest edge appears between day-3 and day-12.Feel free to explore the module and let me know if you need deeper drill-down (e.g., alternative thresholds, risk controls, or strategy formulation).

BP at a Crossroads: Strategic Clarity or Continued Volatility?
BP’s 2.5% decline reflects investor skepticism toward its strategic overhauls, but the stock’s technicals and options activity suggest a potential rebound from key support levels. The $35.36 Bollinger Band low and 200-day MA at $32.57 form a critical floor. Sector leader Exxon Mobil’s 0.36% gain highlights the market’s preference for stable oil production over green energy pivots. Traders should monitor the $36.48–$36.54 resistance zone and watch for a break below $35.36, which could trigger deeper selling. For now, BP20251212P36 offers a high-leverage bearish play, while a rebound above $37.50 could reignite long-side optimism. Action: Short-term bears target $35.36 support; bulls watch for a $37.50 breakout.