the baby (LSE: BP.) The share price has made a fragile advance. It's up 5% in the past week but less than 9% over the year. There is no cloud on the horizon in 2026.

the FTSE 100 index The oil giant has disappointed investors after its flirtation with the green transition ended in a humiliating retreat to what it knows best – fossil fuels. At least he's on familiar ground now. BP recently announced its largest oil discovery in 25 years, the Boomerang field off the coast of Brazil, while second-quarter earnings came in at $2.35 billion, beating analysts' expectations of $1.81 billion.

This allowed the board to raise the dividend by 4% to 8.32 US cents and maintain a £750 million quarterly share buyback programme. Today's trailing yield of around 5.7% is much better than the 3.25% average for the FTSE 100, which is one of the reasons I bought the stock six months ago.

Cash flow and water are calmer

CEO Murray Auchincloss is doing what every beleaguered president does: cutting costs, reducing debt, selling assets ($20 billion is the target) and promising to tighten capital discipline. This would boost cash flow and shareholder returns, but the real driver of BP's share price is oil.

Currently, Brent crude oil is trading at around $65 per barrel. BP could reach around $40, but the market's next move could deal a blow to its prospects. The International Energy Agency warned on October 17 of this “The global oil market may be at a turning point with signs of significant oversupply.”.

She said the surplus averaged 1.9 million barrels per day in the period from January to September this year. China has been storing oil at record levels and now has little spare capacity, while US inventories continue to rise and Middle Eastern producers are pumping oil aggressively. Demand growth continues “lukewarm”According to the International Energy Agency.

This is bleak news for BP. Goldman Sachs now believes that the price of Brent crude may fall towards $40, which could affect the company's profits and perhaps the stock price as well.

Stock expectations and faith

Analysts are surprisingly optimistic. The 29 brokers tracking the stock produced an average one-year price target of around 483p, representing an upside of 11.5% from today's level. Add in dividends, and total returns could reach 18%.

Of course, forecasts cannot be relied upon. There is a very wide range of forecasts, from a low of 374.7 points to a high of 824.8 points. A great deal of unknowns can affect the price, from wars to trade disputes. For investors, the trick is to take the long-term approach and ride the cycles rather than trying to guess them.

Patience and perspective

Energy stocks are cyclical and are often best bought when sentiment is low. Despite all the problems BP is facing, its fundamentals still look solid enough, with solid cash flow and generous dividends.

Personally, I'm holding on to my shares but won't be buying more yet. The oil glut could deepen before it eases, and many FTSE 100 stocks appear to be at better value today. I still think BP is a company to consider buying, but patience is key. I'm eager to fill my BP tank, but not today.