Supply and demand 'rebalancing'
Dudley predicts oil price rise as BP beats expectations
Underlying replacement cost profit was $532 million (£367m) against a forecast loss of $140m and £2.6 billion for the corresponding quarter last year (down 80%).
The company reported a bottom line loss of £334m and took a $917m charge for the 2010 Gulf of Mexico oil spill, taking the total to $56.4bn.
Chief executive Bob Dudley (pictured) said he expected oil prices to move higher as supply and demand returned to balance.
He said: “Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP’s cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track.”
The Brent oil marker price averaged $34 a barrel in the quarter, compared with $44 in 4Q 2015 and $54 in 1Q 2015, and refining margins were at the lowest quarterly average for over five years. Brent prices have so far averaged $40 in the second quarter.
“Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year,” added Mr Dudley.
The board announced an unchanged dividend for the quarter of 10c per ordinary share, to be paid in June.
Brian Gilvary, chief financial officer, said: “As we steadily take out more costs, the point at which we expect to be able to rebalance 2017 organic sources and uses of cash continues to move lower; we currently anticipate being able to achieve this at oil prices in the range $50-55 a barrel.
“This progress underpins our commitment to sustaining BP’s dividend as the first priority within our financial frame. Should prices remain low, we have the flexibility to adjust further within the financial framework.”