Why the BHP (ASX:BHP) share price has surged 3% this week

The Aussie iron ore giant shares are closing in on a new all-time high.

| More on:
happy mining worker fortescue share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a good week for the BHP Group Ltd (ASX: BHP) share price. Shares in the Aussie mining giant are up 3.4% since Friday's close, translating to a $149.4 billion market capitalisation.

Here's why shares in the iron ore miner are enjoying solid gains at the moment.

Why the BHP share price has surged higher this week

In good news for shareholders, the Aussie mining share continues to hover just shy of its $51.82 per share record high.

The most recent run started on Monday as the BHP share price rocketed higher to start the week. Pleasingly for shareholders, those gains have largely been maintained including a 0.5% gain on Thursday.

One key regulatory change from China's central bank has been a factor boosting BHP's fortunes in recent days. As noted in the Australian Financial Review on Monday, the People's Bank of China announced a change in bank reserve requirements which could free up hundreds of billions of additional liquidity in the Chinese economy.

That helped spark share price rallies in global markets last Friday with resources shares being particular winners. The BHP share price, alongside fellow iron ore giants Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Ltd (ASX: RIO), followed suit and surged when markets reopened on Monday.

Crude oil prices have also been climbing, aided by declining inventories and increasing tensions amongst the OPEC oil cartel. Both Brent and WTI crude prices climbed higher and sparked a surge in BHP shares on Monday. According to its 2020 annual report, BHP generated US$4.1 billion or 9.5% of its revenue from petroleum in FY2020.

That means the company has exposure to climbing commodity prices through potentially higher realised sale prices in significant volumes.

The BHP share price is sitting just 1.7% from its all-time high. That's not bad for an S&P/ASX 200 Index (ASX: XJO) share hit hard in the March 2020 bear market.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors started the week off in a good mood today.

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why Bellevue Gold, Bubs, Clarity Pharmaceuticals, and Regal Partners shares are rising today

These shares are starting the week on a positive note.

Read more »

Two people lazing in deck chairs on a beautiful sandy beach throw their hands up in the air.
Travel Shares

Guess which ASX All Ords travel stock just rocketed 17% on an earnings upgrade

Investors are piling into the ASX All Ords travel stock today. Here's what's happening.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »