Petrobras stock has moved sideways this year as crude oil price has moved downwards. It was trading at $11.60 on Tuesday, down by 21% from its highest point in 2024. It has remained between the support and resistance points at $11.40 and $14.2.
Why Petrobras share price has wavered this year
Petrobras stock price has underperformed the broader market this year because of the energy sector. Brent and West Texas Intermediate have all pulled back from their highest points this year.
Oil has dropped because of the rising fear that the world economy will slow down this year because of Donald Trump’s tariffs. The OECD, World Bank, and the IMF have all lowered their economic forecasts for the year. Crude oil price normally falls when the global economy is not doing well.
It has also plunged because of the rising concerns about supply after OPEC+ members boosted production for three consecutive months. Trump is also working on a nuclear deal with Iran that will bring more oil supply in the market.
Therefore, a combination of high oil supply and low demand always leads to lower prices. This also explains why other oil and gas stock prices have tumbled this year. ExxonMobil stock has dropped by 13% from its highest point this year, while Shell has fallen by 4.5%.
Read more: Here’s why the Brent crude oil price could crash below $50 soon
Q1 earnings report
The most recent results showed that Petrobras EBITDA rose by 8% (QoQ) in the first quarter to $10.7 billion, while its net income rose to $4 billion.
This growth was mostly because of higher oil production, which offset lower prices during the quarter. The EBITDA was lower than the $12.4 billion it made in the same period last year. Its oil production rose to 2.7 million barrels a day, up by 5.4% from the last quarter.
This increase was because the company started production on FPSO Almirante Tamanadre, which will ultimately get to 225,000 barrels of oil per day and 12 million cubic meters of gas.
Petrobras has also made more progress in the past few months, including new discoveries in the Campos Basin, and started commercial operation of the second module of the natural gas processing unit on the Boaventura Energy Complex.
The case for Petrobras stock
Petrobras has more upside because of its cheap valuation and high dividends. It has a forward price-to-earnings (PE) of 4.10, much lower than the sector median of 13. Its forward EV-to-EBITDA multiple of 3.08, lower than the sector median of 5.7.
Petrobras has one of the highest dividend yields in the energy industry. It has a dividend yield of about 16.5%, much higher than other companies. This means that a $10,000 investment in the company will bring in at least $1,650 in dividends. It paid $11.7 billion in dividends in the first quarter.
Petrobras stock price technical analysis
The weekly chart shows that the Petrobras share price has moved sideways in the past few months. It has remained above the 200-week moving average, a sign that bulls are in control.
The stock has formed a bullish flag pattern, which comprises of a horizontal channel and a flagpole-like pattern. This pattern is one of the most bullish signs in technical analysis.
Therefore, the Petrobras stock price will likely bounce back and hit the upper side of the channel at $14.21. A move above that level will point to more gains, potentially to the upper side of the channel at $14.2
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