BP reports 'exceptional trading results' amid volatile oil prices
BP announced on Tuesday that it expects its massive oil?trading -desk to report "exceptional" first quarter results, signalling a windfall resulting from the spike in crude oil prices triggered the U.S. and Israeli war against Iran.
In a trading statement, the company said that it expected its net debt to rise from $22 billion just over a quarter ago to $25 billion or $27 billion due primarily to changes in working capital. Working capital is an accounting measure of liquidity based on current assets minus liabilities.
The outlook for the first quarter was similar to that of Shell, a European competitor, who also cited strong results in oil trading - an area in which European majors are active compared to U.S. rivals.
Higher Oil Prices, Higher Refining Margins
Brent crude, the global benchmark for oil prices, soared past $120 per barrel in recent years after U.S. and Israeli?strikes against Iran began?in late-February. This was followed by Tehran closing down the Strait of Hormuz route to shipping as well as attacks on Gulf neighbors.
Calculations show that Brent averaged $78 per barrel in the quarter from January to March, compared to $63 during the fourth quarter, and $75 during the same period last year.
BP said that it expects its overall oil and natural gas production to remain roughly flat for the quarter.
It said that the refining margins increased to $16.9 per barrel in the first three months from $15.2 the previous three months. This would boost the results of its refined products business by $100 to $200 million.
Most energy companies do not disclose the full results of their trading divisions.
NEW BP CEO FACES AGM THIS ?MONTH
BP will report its first-quarter results by April 28.
Meg O'Neill, the fifth CEO of the company since 2020, took over as CEO this month. She pledged to continue a year-old overhaul to redirect 'billions' of dollars from low-carbon projects into oil and natural gas in order to increase profitability.
She will be facing shareholders at the company’s annual general meeting, on April 23, after influential proxy advisors and some shareholders supported votes against board wishes. Reporting by Shadia Naralla. Kirby Donovan, Mark Potter and Kirby Donovan edited the article.
(source: Reuters)
