BP is expecting a “strong performance” from its trading division, which buys and sold oil. It also expects an improvement in the upstream production and gas of oil and low-carbon fuels.
The FTSE group stated in advance of the release of its first quarter results at the beginning of May that “the oil result is expected be strong after a weak result in fourth quarter”.
It noted, however, that oil and natural gas prices fell during the first quarter of 2024. This would result in a loss of $300 to $600 million on its oil production and operation business, and $200 to $400 million on its gas and low carbon operations.
Brent crude, which is the benchmark for international oil prices, was $83.16 per barrel on average in the first three months, down from $84.34 during the last quarter of 2013. Oil prices rose in recent weeks due to supply concerns, fears of an increase in political unrest in the Middle East and a rise in oil demand. They have now breached $90 for the first since October.
BP reported profits in the fourth quarter of 2012 that were well ahead of expectations, despite the fact that oil and gas prices had fallen from their highs immediately following the outbreak of the war in Ukraine. Profits dropped to $13.8 billion from $27.7 in 2022, a record.
Murray Auchincloss will be boosted by the encouraging first quarter, after he was named permanently to BP’s top job in January. He is trying to regain the confidence of investors following Bernard Looney’s abrupt resignation last year.
Auchincloss (53), has committed to following the same strategic directions pursued by Looney under whom he served as finance chief. This includes a greater embracement of greener energy forms than other major oil and gas firms. Bluebell Capital has criticized the move. The activist investor was previously behind campaigns against Glencore the commodities group and Danone the foods company.
BP reported lower oil-refining profits during the first quarter. This could be due to a weaker demand for petrochemicals or higher oil prices.
The shares closed at 516 1/2p, up 6 3/4p or 1.3 percent.
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