What is driving the U.K. fuel panic and what comes next for BP?

Covid, amongst other things, has highlighted the delicate nature of global supply chains built for efficiencies over reliability.

Energy 14

Anecdotes of items being hard to obtain post-Covid have become commonplace. From cars and chips to labour, food, and now fuel as scenes of long queues forming at U.K. petrol stations have greeted viewers. 


Despite UK-based oil companies having confirmed there is “not a national shortage of fuel,” panic buying has left thousands of petrol stations out of fuel. The cause of the panic, oil giant BP said last week it would “temporarily” close petrol stations due to a shortage of lorry drivers. 

There is currently a shortage of drivers in Europe, the U.K., and the U.S., struggling to keep up with booming consumer demand following the re-opening. A shortage magnified in the U.K. as drivers from Europe returned home during the Covid pandemic on top of those that left following Britain’s Brexit from the European Union last year. 

To ease the short-term pressure, the U.K. government has said it would issue 5,000 three-month visa’s for truck drivers to help with the run-up to Christmas. It also announced the Army had been put on standby to transport fuel supplies to help ease the pressure on petrol stations. 

To provide a longer-term solution, the government has sent letters to nearly one million drivers who hold the necessary heavy vehicle license (HGV), encouraging them to return to the industry, and announced plans to train new drivers. 

On Monday, the share price of BP PLC (LSE: B.P.) closed almost 3.5% higher aided by the price of Brent oil prices trading to a new yearly high. Technically the share price of BP appears set to follow suit after closing above trendline resistance near £326.00 coming from the June 2020, £376.55 high. 

This will likely see BP retest and break the year-to-date high at £336.95 with scope to push towards the next layer of resistance at £350.00. 


BP Daily chart

Source Tradingview. The figures stated areas of September 28, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

More from FTSE 100

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.