BP Shares Plummet 2.69% Amid Cost-Cutting Controversy and Strategic Shifts – What’s Next for the Oil Giant?

Summary
• BP announces elimination of paid rest breaks and most bank holiday bonuses for 5,400 employees
• Advanced talks to sell Castrol lubricants business to Stonepeak Partners at $8B+ valuation
• Exit from Oman green hydrogen project sparks sector speculation
• Intraday price slumps to $36.1715, down 2.69% from $37.23 close

BP’s stock is under pressure as a controversial cost-cutting move collides with strategic overhauls in its downstream operations. The oil major’s decision to strip employee benefits—framed as a response to rising labor costs—has ignited backlash from workers and unions. Meanwhile, the potential sale of its Castrol division and exit from green hydrogen projects signal a pivot toward core profitability. With technical indicators showing bearish momentum and options volatility spiking, investors are recalibrating their bets on the energy giant’s future.

Employee Benefit Cuts and Strategic Overhauls Spark Investor Anxiety
BP’s decision to eliminate paid rest breaks and most bank holiday bonuses for 5,400 employees in its UK petrol forecourts has directly fueled investor skepticism. The move, intended to offset a 6.7% minimum wage increase under the Living Wage Foundation, has been criticized as a stealth pay cut. Employees report a 6.25% reduction in take-home pay, undermining the hourly raise. Compounding concerns, BP’s exit from Oman’s green hydrogen project and advanced talks to sell its Castrol division at a $8 billion valuation signal a retreat from transition investments. These actions, coupled with union warnings about eroding worker rights, have triggered a sell-off as investors question the company’s long-term strategy and labor relations.

Oil & Gas Refining & Marketing Sector Mixed as Valero Energy Outperforms
The Oil & Gas Refining & Marketing sector is showing divergent momentum. Valero Energy (VLO), the sector leader, is up 1.18% on strong cost-cutting execution and operational efficiency. In contrast, BP’s strategic shifts—selling non-core assets and exiting green hydrogen projects—highlight a fragmented approach. While Valero’s investment ratings (BUY with $212 target) reflect confidence in refining margins, BP’s moves suggest a focus on short-term liquidity over long-term decarbonization. This contrast underscores the sector’s bifurcation between traditional refining plays and transition-focused strategies.

Options Playbook: Leveraging Volatility in BP’s Bearish Slide
• MACD: 0.4255 (bullish divergence), Signal Line: 0.3916, Histogram: 0.0339 (positive momentum)
• RSI: 60.16 (neutral), Bollinger Bands: $35.36–$37.49 (price near lower band)
• 200D MA: $32.57 (far below current price), 30D MA: $35.94 (resistance ahead)
• Support/Resistance: 30D: $36.48–$36.54, 200D: $33.75–$33.98

BP’s technicals suggest a bearish bias with key support at $35.36 and resistance at $37.49. The RSI hovering near 60 indicates neutral momentum, but the MACD’s positive divergence hints at short-term buying pressure. For options, focus on deep out-of-the-money puts with high leverage and moderate delta to capitalize on a potential breakdown below $35.36.

Top Options Picks:
• BP20251212P36: Put option, strike $36, expiration 12/12
- IV: 18.89% (moderate), Leverage Ratio: 113.08%, Delta: -0.4244 (sensitive to price drops), Theta: -0.043961 (time decay), Gamma: 0.386792 (high sensitivity to price swings), Turnover: 2,394
- Payoff: At 5% downside ($34.42), intrinsic value = $1.58 per share. High leverage and gamma make this ideal for a sharp decline.
• BP20251212P36.5: Put option, strike $36.5, expiration 12/12
- IV: 15.58% (moderate), Leverage Ratio: 69.59%, Delta: -0.644976 (high sensitivity), Theta: -0.048402 (time decay), Gamma: 0.445133 (very high sensitivity), Turnover: 676
- Payoff: At 5% downside ($34.42), intrinsic value = $2.08 per share. Strong gamma and delta position this for explosive gains if BP breaks below $36.50.

Hook: If $35.36 support fails, BP20251212P36.5 offers a high-leverage bearish play with a 5% downside target.

Backtest BP Stock Performance
Below is the interactive event-study dashboard that summarizes how BP’s share price behaved after every ≥ 3 % intraday plunge since 1 Jan 2022.Key take-aways (concise):• 24 qualifying plunges were found in the sample period. • Day 1 tends to drift slightly lower (–0.9 % on average, 58 % win-rate). • From Day 8 onward the pattern turns positive and becomes statistically significant, peaking around Day 18-20 with ~4.5 % average excess return and 71 % win-rate. • By Day 30, the mean gain is +4.5 %, still significant, suggesting a 1-month recovery bias after sharp intraday falls.Auto-filled parameters & rationale:1. Price type = close: most common basis for event studies and aligns with available dataset. 2. Look-ahead window = 30 days: default horizon to capture near-term mean-reversion; can extend on request. 3. Risk controls were not applied (pure event impact analysis).Feel free to click into the dashboard for full daily curves, win-rate charts and event list.

BP’s Strategic Realignments Test Investor Patience – Watch Valero’s Lead for Sector Clues
BP’s stock faces a critical juncture as its cost-cutting measures and asset sales collide with sector-wide uncertainty. While the company’s moves aim to boost short-term liquidity, the backlash from employees and unions could erode long-term trust. Technical indicators suggest a bearish bias, with key support at $35.36 and resistance at $37.49. Investors should monitor Valero Energy’s (VLO) 1.18% gain as a barometer for refining sector resilience. For BP, a breakdown below $35.36 could trigger a deeper correction, making deep out-of-the-money puts like BP20251212P36.5 compelling. Act now: Position for a potential $34.42 downside scenario with high-gamma options and watch for regulatory or union responses to the benefit cuts.