The BP (LSE: BP) share price has had a bumpy month, falling 8.37%. I’ve been questioning whether or not so as to add the FTSE 100 oil and fuel large to my self-invested private pension (SIPP) for months, and following the dip it’s screaming at me to make the leap. Ought to I dive in?

I’ve an issue. I’ve solely received £3,000 of money left in my SIPP. So if I purchase BP shares at present, it means placing rival targets on the again burner, resembling HSBC Holdings and Rio Tinto.

Meaning I’ve to be actually, actually satisfied by BP. There’s actually quite a bit to tempt me at present.

FTSE 100 favorite

Many buyers see BP as a core portfolio holding however pure assets shares will also be extremely cyclical as demand waxes and wanes with the worldwide economic system. So it is sensible to purchase them once they’re down moderately than up, for my part. Nonetheless, that additionally requires the persistence to take a seat again and watch for them to get better. Or sit tight as they slide additional.

BP’s shares rocketed with the oil price after Russia invaded Ukraine however have been sliding because the power shock recedes. Crude is now at a three-month low because the unsure international economic system hits demand and fears of a direct Israel-Iran battle recede. In the present day, the inventory seems super-cheap buying and selling at simply 6.97 instances earnings. That compares to a mean valuation of 13 instances throughout the FTSE 100 as an entire.

A disappointing set of first-quarter income additional knocked sentiment, with underlying substitute price income crashing from $5bn a 12 months in the past to only $2.7bn. But that didn’t deter the board from saying one other share buyback, this one price $1.75bn.

BP shares are down 0.72% over one 12 months, and 11.29% over 5 (however with loads of peaks and troughs in between). That actually tempts me. Whereas it’s no assure towards additional falls, it does cut back the chance of one other drop if I purchase at present.

This inventory is tough to withstand

The place the oil price goes subsequent is anyone’s guess. OPEC+ manoeuvres, geopolitics and whether or not we get an financial mushy touchdown will all play their half, together with a bunch of unknowns. I believe there’s an opportunity it might get better as soon as rates of interest begin falling and exercise picks up. The issue is, we nonetheless don’t know when that shall be. Mockingly, a decrease oil price might help BP within the longer run, by deterring funding in renewables.

BP has trimmed its local weather objectives, which can cut back danger and prices within the brief run, however go away it uncovered if rivals pioneer clear power breakthroughs. It isn’t simply on the mercy of oil price falls however politicians wielding windfall taxes when income rise.

But the corporate remains to be making sufficient cash to maintain the dividends and share buybacks flowing till the following oil price spike. A rising yield of 4.98% in 2024 and 5.03% in 2025 is the large attraction right here.

At at present’s lowly valuation, BP shares are screaming ‘buy me’ in my face. If I used to be flush with money, I wouldn’t have to be advised twice. As a substitute, I’ve a option to make and I haven’t made it but!