The BP (LSE:BP) share price had a arduous 2024 and seemed too low-cost to resist. So I bought it FTSE100 oil and gas giant in September and November at what I consider to be a bargain valuation of less than six times earnings.

So far I’m down 7.7%, but considering my goal is to hold the stock for years, preferably decades, this is just the beginning.

Long-term BP investors will have a harder time, as the stock is down 18.93% in 12 months. The rate of return of 5.95% will only partially compensate for this loss. The obvious culprit is the price of crude oil, with Brent crude oil down 6.36% in 2024 to $71.04 per barrel.

Could FTSE 100 shares surge next year?

BP is more than just an oil producer, but its shares are still closely linked to energy prices. We saw this in the 2022 energy shock when they launched the rocket.

It is not known where the oil will go. There are so many variables at play. US President-elect Donald Trump announced an boost in shale production next year. By increasing supply, Trump can lower the price. Although if it restarts the U.S. automotive economy, that could boost demand. But the trade war could lower it again.

Trump promised to bring peace to Ukraine. If he succeeds, Russian oil and gas could flow into Europe again, causing prices to fall. But what if he doesn’t?

Then there is Saudi Arabia. In September, there were rumors that it would open the taps to regain lost market share, which would drive down prices even further. Last week, however, OPEC+ delayed the start of production increases and slowed the pace of production increases.

I just read on Oil Prices.com that natural gas prices will boost this winter “due to a combination of high demand, tight supply and limited production growth”. And I haven’t even mentioned the green transformation.

Will the switch to renewable energy sources reduce the prices of fossil fuels? Or will falling oil and gas prices destroy renewable energy sources? This is a major challenge for BP in particular as it retreats from its “Beyond Petroleum” strategy and returns to familiar fossil fuel territory.

It’s too much for my little brain. So what do the experts say? On Friday (December 6) Morgan Stanley predicted that the price of Brent crude oil will average $70 per barrel in the second half of 2025. If true, it won’t cause a fire below BP’s share price.

However, the 26 analysts who provide annual stock price forecasts are sanguine. They set an average target of 505.8p, an boost of 34.25% compared to today. Sounds sanguine, but I hope they’re right. Of these, 11 rated it as a “Strong Buy”, 4 as “Buy” and 14 as “Hold”. Only one says Sell.

I can justify my decision to buy BP for diversification reasons. I had no energy reserves. Besides, his shares were dirt low-cost. And the dividend is high and growing. It is forecast to reach 6.3% next year, covered exactly twice by earnings.

Personally, I don’t know where BP stock will go in 2025. Nobody knows. However, considering the low valuation and high profit, I will gladly decide to do so.