A fall in oil costs over the past decade has prompted a corresponding fall in BP (LSE:BP.) shares over the interval. At 359.4p per share, the FTSE 100 oil main is now 23.6% cheaper than 10 years in the past when it was buying and selling at 470.1p. Which means somebody who invested £10,000 again then would have seen the worth of their funding dwindle to £7,644.

However BP shares aren’t fairly the dumpster hearth they look like at first look. Because of a gentle stream of blue-chip-beating dividends — figuring out at 253.5p per share since mid-2015 — a £10k funding within the firm would have delivered a complete return of £13,037, or 30.4%.

The primary rule of investing isn’t to lose cash, says investing guru Warren Buffett. So somebody who invested within the oilie 10 years in the past would have handed that check. Actually, they’d have made a revenue.

But in comparison with the broader FTSE 100, the return on BP shares has been fairly poor over the interval. They’ve offered a median annual return of two.7%, nicely under the Footsie common of 6.4%.

However can they supply a greater return transferring forwards? And will I take into account shopping for the corporate in the present day?

Shiny forecasts

Sadly, forecasts for BP’s share price by to 2035 are unavailable. However estimates can be found for the subsequent 12 months. And broadly talking, they’re fairly optimistic.

There are at the moment 26 analysts with rankings on BP shares proper now. They usually’ve slapped a median price goal round 460.7p on them, up greater than 1 / 4 from present ranges:

The opinion on BP’s price route does range amongst this grouping nevertheless. One analyst thinks the oil producer will fall to round 339.9p per share over the subsequent 12 months.

However as you possibly can see, present projections are optimistic. One particularly bullish forecaster thinks BP will transfer inside a whisker of 650p, a stage not seen April 2010.

Ought to I purchase BP shares?

BP is aware of its share price has upset over the previous decade. So it’s just lately taken steps to overtake its technique to spice up money flows and get its debt down. This contains pivoting away from inexperienced power to concentrate on oil manufacturing. It’s additionally searching for to chop working prices throughout the group.

Sadly although, BP’s choice to prioritise fossil fuels comes at a time when oil costs are sinking once more. Brent crude sank to four-year lows this month on fears of a worldwide commerce conflict, indicators of an financial slowdown, and information of rising output from OPEC+ nations.

Commodity markets are famously risky nevertheless. And elements like a falling US greenback and diminished rig exercise Stateside might assist oil recuperate floor.

However on the entire, the outlook for crude costs is fairly bleak, which is a worrying omen for BP. Certainly, HSBC has lower its common price forecasts to $68.50 and $65 per barrel for 2025 and 2026 respectively. That compares with $67.70 just lately.

This might not solely spell bother for BP’s share price, however given the corporate’s large money owed, I concern it could additionally trigger a pointy dividend lower. Web debt’s estimated to have been $27bn on the finish of Q1, up $4bn from December.

Given its bleak prospects for the subsequent 12 months and past, I’m joyful to keep away from BP shares proper now.