BP Shares Plummet 2.95% Amid Castrol Sale Talks and Strategic Retreat from Green Hydrogen – What’s Next for the Oil Giant?

Summary
• BP’s Castrol lubricants division is in advanced talks to sell for over $8 billion to Stonepeak Partners, signaling a major asset shift.
• BP exits Oman’s green hydrogen project, aligning with its broader pivot away from transition investments.
• Intraday price swings see BP trading between $36.125 and $36.725, with a 2.95% drop from its 52-week high of $37.64.

BP’s stock faces a sharp intraday decline as strategic divestitures and green energy retreats dominate headlines. The oil giant’s dual moves—selling its Castrol unit and exiting Oman’s green hydrogen project—have triggered investor skepticism, compounding pressure from a volatile energy market and shifting capital priorities.

Castrol Divestiture and Green Hydrogen Exit Spark Investor Concerns
BP’s 2.95% intraday drop is directly tied to two strategic decisions: the potential $8 billion sale of its Castrol lubricants business and the exit from Oman’s green hydrogen project. The Castrol deal, while aligning with BP’s $20 billion asset-sale target by 2027, signals a retreat from high-margin downstream operations. Meanwhile, the cancellation of the Oman project underscores BP’s recent pivot away from green hydrogen investments, a move that clashes with global net-zero ambitions. These actions have raised questions about BP’s long-term strategy, particularly as competitors like EnergyPathways gain traction in hydrogen innovation. The market’s reaction reflects skepticism about BP’s ability to balance short-term liquidity goals with long-term decarbonization commitments.

Integrated Oil & Gas Sector Faces Mixed Signals as BP Retreats
The Integrated Oil & Gas sector, while broadly focused on asset optimization and digitalization, contrasts sharply with BP’s current trajectory. Recent sector news highlights a $320 billion potential savings from digital adoption, emphasizing efficiency and resilience. BP’s retreat from green hydrogen and lubricants, however, diverges from this trend, positioning it as a laggard in transition investments. While peers like Exxon Mobil (XOM) see a 0.26% intraday gain, BP’s strategic ambiguity creates a divergence in sector performance. This mismatch amplifies risks for investors seeking alignment with broader industry shifts toward technology-driven decarbonization.

Options Playbook: Capitalizing on BP’s Volatility with Strategic Put and Call Selections
• MACD: 0.4255 (bullish divergence from signal line 0.3916)
• RSI: 60.16 (neutral, avoiding overbought/oversold extremes)
• Bollinger Bands: Upper $37.495, Middle $36.428, Lower $35.361 (price near lower band)
• 200D MA: $32.5688 (far below current price, indicating long-term support)

BP’s technicals suggest a short-term bearish bias amid a long-term bullish trend. Key support levels at $35.36 (lower Bollinger) and $33.75 (200D range) are critical for near-term stability. The 30D MA at $35.93 offers a potential floor, but a break below $35.36 could trigger deeper declines. Given the options chain’s liquidity and implied volatility, two contracts stand out:

• BP20251212P36 (Put, Strike $36, Expiry 12/12):
- IV: 17.43% (moderate)
- Leverage Ratio: 112.86% (high)
- Delta: -0.4488 (sensitive to price drops)
- Theta: -0.043381 (rapid time decay)
- Gamma: 0.424229 (high sensitivity to price swings)
- Turnover: 2,394 (liquid)
- Payoff (5% downside): $0.13 (max gain if BP drops to $34.32)
- Why it stands out: High leverage and gamma make this put ideal for capitalizing on a sharp decline, with moderate IV ensuring cost efficiency.

• BP20251212C37 (Call, Strike $37, Expiry 12/12):
- IV: 21.01% (moderate)
- Leverage Ratio: 257.96% (very high)
- Delta: 0.2203 (moderate sensitivity)
- Theta: -0.009278 (slow time decay)
- Gamma: 0.263621 (moderate sensitivity)
- Turnover: 2,007 (liquid)
- Payoff (5% downside): $0.00 (no gain if BP drops to $34.32)
- Why it stands out: Aggressive bulls may consider this call for a rebound above $37, leveraging high leverage and low theta for time-insensitive gains.

Trading Insight: Short-term bearish plays favor the BP20251212P36 put, while the C37 call offers a speculative long-side bet. Monitor the $35.36 support level and 200D MA for directional clues.

Backtest BP Stock Performance
Below is an interactive event-backtest module that summarizes BP’s performance after every intraday draw-down of at least –3 % since January 2022. You can explore the statistics and drill into the full visual report.Key takeaways (30-day horizon):• 78 events detected. • Average excess return vs. benchmark turns positive by day 5 and reaches ≈ +3.4 % by day 30. • Win-rate stays ≥ 60 % during most of the post-event window. • Statistical significance emerges from day 5 onward, suggesting a mean-reversion effect after sharp intraday sell-offs.Feel free to open the module to inspect the detailed day-by-day metrics and distribution charts.

BP at a Crossroads: Strategic Shifts and Market Volatility Demand Tactical Precision
BP’s current trajectory hinges on the success of its Castrol divestiture and its ability to navigate green hydrogen’s uncertain future. While the stock’s technicals suggest a near-term bearish bias, the long-term bullish trend remains intact. Investors must weigh the risks of strategic ambiguity against the potential for asset-driven recovery. With Exxon Mobil (XOM) showing resilience at +0.26%, the sector’s mixed signals underscore the need for disciplined position sizing. Watch for $35.36 support breakdown or news on the Castrol deal’s finalization—either could trigger a decisive move in BP’s price action.