Lower oil prices drag BP profits down
Giant faces pressure as crude price rally fades
BP, the first oil major to report second-quarter results, has said its profits fell 45 per cent as lower crude prices continued to erode income and refining margins shrank.
Profit adjusted for once-off items and inventory changes dropped to $720m from $1.3 billion a year earlier, the company said. That missed the $819m average estimate of 13 analysts surveyed by Bloomberg. Downstream earnings, which include refining, declined 19 per cent.
Refining margins were the lowest for the second quarter since 2010 and will continue to be under “significant pressure,” BP said. Although Brent crude’s rebound provided some relief compared with the first quarter,chief executive Bob Dudley still faces a difficult road ahead as the rally fades amid slowing demand growth and returning production from Canada to Nigeria. BP’s results are likely to be an indication of how the other oil majors will perform.
