When it comes to big brands, they don’t get any bigger than BP. Standing head and shoulders above every other UK based oil company, BP have been both a friend and a foe of many an investor over the years. Sadly, the latter is becoming more and more common. During 2014 BP shares have found themselves battling against wave after wave of controversy and making little headway. As the price of BP shares continues to have a question mark hanging over it, this article looks at both the whys and why nots when it comes to investing in BP shares.
Why should you buy BP shares?
What has impressed investors most about BP shares over the years has been their resilience during times of crisis. It can be argued that this has occurred out of necessity, but it has occurred and that is what’s most important. The worry will always be that eventually BP and BP shares will endure one controversy too many, but between now and then the company remains capable of handling everything that is thrown at it.
BP has grown to the size it is now not by standing still and rest on its laurels, they are an oil company that almost permanently has expansion on the mind. For example, in 2012 alone BP launched five major projects across the Norwegian Sea, North Sea, Gulf of Mexico and Angola. By the end of 2014 they had fifteen startups in operation, making them a serious power player in the world of oil.
Why shouldn’t you buy BP shares?
When it comes to BP shares all that glistens is not gold. As mentioned above, BP has been no stranger to controversy and it can be argued that such is now taking a toll on the price of BP shares. In 2014 they dropped to their lowest price in over ten years, with their public image taking a beating in the process. Financially BP is still a strong entity, but one must question the effect that all these sanctions are going to have on the company’s bottom line in the future.
During the 1990s oil prices suffered an almighty crash, which proved to be both lengthy and sector altering. Nobody ever thought that such could occur again; they were proved wrong during the fall of 2013. As the year closed out those who had BP shares had every right to feel concerned. Amidst a powerful showing of the US dollar, the docile geographical environment and European production slowdowns meant that oil prices became increasingly volatile. Those looking to buy BP shares need to factor in that the effect of the oil price crash may linger long into the future.
Have BP suffered one controversy too many during 2014? Only time tell. In the past BP have never struggled to shift shares, but one can argue that the pendulum is beginning to swing in the other direction. Whether you choose to buy BP shares or not will largely depend on how resilient you think the BP brand is.
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Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.