At time of writing, Beach Energy Limited [ASX:BPT] is down 5.6% — trading at $1.605 in major volume.
From a peak of $2.26 early last month, Beach Energy has been trending downwards:
The stock has been hurt badly by sliding oil prices.
Oil price drop leads to Beach Energy sell off
On a day that saw WTI oil slide a further 0.2%, it appears investors have lost patience with Beach Energy in particular.
WTI stands for West Texas Intermediate and is the most widely quoted oil benchmark.
As you can see below, the slide in oil prices has coincided with Beach Energy’s fall:
Beach Energy’s share price future tied to further developments in oil price
With a future so closely tied to the price of oil, it is difficult forecasting where the stock could head.
Markets & Money’s Jason Stevenson does an excellent job of outlining why oil could get a big bounce in the coming months.
A lot hinges on Iranian sanctions and growing demand.
Demand from China is growing, and according to Jason Stevenson it will likely flaunt the sanctions on Iran by buying the unpurchased oil.
So if he is right, Beach Energy could be set for a big bounce as well.
Long-term risks include a recession, which has traditionally crushed oil prices as global growth slows.
All things considered, there could be a window of opportunity for Beach Energy, should it find its bottom in the coming weeks.
For Markets & Money