BP and Shell Share Price Targets Cut as Oil Market Faces Headwinds Next Year

Bernstein analysts cut the price targets of both BP (LON: BP.) and Shell (LON: SHEL) on Monday, citing potential headwinds in the oil market next year.

First off, the firm lowered its target for BP to 600p from 630p, keeping an Outperform rating on the shares. BP shares are down over 11% this year, trading around the 411.75p mark.

Bernstein analyst Oswald Clint told investors in a research note that oil markets are set to face headwinds in 2025.

This is due to high OPEC+ spare capacity and the company's intention to gain market share by returning 2.2mbd. In addition, they state that oil demand has slowed due to China.

Meanwhile, the Shell price target was lowered to 3,200p from 3,250p per share. Shell shares are flat for the year to date so far, trading at 2,577p.

Bernstein analyst Irene Himona kept an Outperform rating on the stock, telling investors that their 2024-25 base case takes into consideration a six-month delay to the return of 2.2mb/d.

Bernstein still sees this driving increased OECD inventory and a downgrade of its 2024 and 2025 Brent price assumptions to roughly $82 and $76 per barrel, respectively.

When assessing the numbers, Bernstein says the new base case means it downgraded the European integrated sector's aggregate dollar earnings by 12% in 2024 and by 12.5% in 2025.