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Analysts positive on BHP, oil price rising

iron ore and mining equipment

Mining giant BHP (AU: BHP) is scheduled to release its half-year earnings report on Tuesday, 15 February.

On January 19, BHP flagged a billion dollar hit to its February half-year financial accounts from impairments and fresh payments over the Samarco tailings disaster following bumper iron ore shipments.

Mining companies have been hit by labour shortages, but BHP’s iron ore division lifted shipments to near record levels in the December quarter.

BHP boss Mike Henry took over as chief executive on 1 January 2020. He’s led the company’s exit from petroleum, a move into the potash market and the unification of the company’s corporate structure in Australia.

BHP paid a record $US2 a share dividend on the back of an $US11.3bn ($15.5bn) net profit for the full year, taking its total return to shareholders to $US15bn for the full year, according to Mr Henry last August.

Investing.com shows 7 Outperform recommendations on BHP, 1 Sell and 5 Neutral ratings. The share price closed down 1.1% on Monday at $48.31 and is up about 15% year to date.

On the S&P/ASX 200, the index closed down 0.4% at 7243.90. US futures are climbing. Crown Resorts has entered into a scheme implementation deed with Blackstone to acquire the casino operator at $13.10 a share, representing a 32% premium from when takeover talks began in earnest last November.

Oil prices continue to head higher, moving closer to $US100 a barrel. Russia is the world’s third-largest oil producer. Any disruption to production, if there were to be a move by Russia on Ukraine, would be sure to push oil prices higher quickly. WTI is currently above $US94 and Brent above $US95. Spare supply is limited and demand for oil has outpaced production growth, as economies bounce back from the worst of the pandemic. Global leaders are rushing to help defuse the growing tension.

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