Publications: Notes at the Margin

The BP Royalty Trust: Warning of Impending Price Declines or a Failing Economic Indicator? (September 10, 2012)


Historically, the BP Trust (BPT) has provided an ideal financial instrument for measuring investor expectations for the oil price trend. The BPT share price dropped sharply the last week of August. In fact, it fell twenty-five percent from July 1 to September 1. The decline presumably reflects a change in investor expectations regarding the growth rate of future oil prices if the BPT is still a reliable indicator of price direction. This report discusses the possible reasons for the share price decline.


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