Shell PLC (LSE:SHEL, NYSE:SHEL) is ‘a buy’ and BP PLC (LSE:BP.) is ‘a sell’, that’s according to analysts at JP Morgan, who also see upside to the crude oil price in the near term.
The price of oil is heading toward $90 per barrel, the American investment bank also told investors in a wide-ranging sector note.
The analyst team highlighted that the second-quarter performances “screen as solid but unspectacular”.
They also noted that lower refining and seasonal gas trading are points of deviation between the big-cap peers.
“We suggest staying ‘overweight’ Shell for LNG upside, self-help momentum and are sellers of any notable strength in underweight’ BP as underperformance leaves a balanced second quarter risk/reward,” the JP Morgan analysts said.
Earlier today, BP reiterated previously announced second-quarter guidance in a trading update.
Avoiding concrete numbers, the oil supermajor said upstream production in the second quarter is expected to be broadly flat sequentially and “slightly lower” in gas and low-carbon energy.
Full-year guidance has upstream production slightly higher than in 2023, with gas and low-carbon energy slightly lower.
As previously announced in BP’s first-quarter update, full-year capital expenditure is tipped to hit $16 billion (£12.5 billion).
Prices on Brent in the second quarter averaged $84.97 a barrel compared to $83.16 a barrel in the first quarter. But gas prices took a hit, averaging $1.89 per one million British thermal units (mmBtu) in the second quarter compared to $2.25/mmBtu in the first quarter.