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

Oil extraction
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

Related tags: Brent Equities Stocks WTI

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