BP expects a “strong” first-quarter performance from its trading business that buys and sells oil, alongside improved upstream production of oil, gas and low-carbon energy.
The FTSE 100 group said in advance of its first-quarter results, which will be released at the start of May, that “the oil trading result is expected to be strong following a weak result in the fourth quarter”.
However, it noted that oil and gas prices had fallen during the first three months of 2024, which would have an adverse effect of between $300 million and $600 million for its oil production and operations business and between $200 million and $400 million for the gas and low-carbon operations.
The price of Brent crude, the international benchmark, averaged $83.16 a barrel in the first quarter, down from $84.34 in the final three months of last year. However, oil prices have risen in recent weeks amid supply concerns and fears of an escalation in the political turmoil in the Middle East, and have breached the $90 mark for the first time since October.
During the final quarter of last year, BP joined its oil major rivals in reporting profits that were comfortably ahead of market expectations, despite oil and gas prices receding from the highs recorded in the immediate aftermath of the outbreak of war in Ukraine. Profits last year declined to $13.8 billion, from a record $27.7 billion in 2022.
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The encouraging first quarter will provide an early boost for Murray Auchincloss, who was appointed permanently to the top job at BP in January, as he seeks to rebuild investors’ confidence after the abrupt resignation of Bernard Looney last year.
Auchincloss, 53, has committed to the same strategic direction pursued by Looney, under whom he was finance chief, which includes a greater embrace of greener forms of energy than other leading oil and gas companies. The move has drawn criticism from Bluebell Capital, the activist investor that previously was behind campaigns against Glencore, the commodities group, and Danone, the foods company.
BP also flagged lower oil-refining margins during the first quarter, which can be the result of weaker demand for petrochemical products or rising oil prices.
The shares rose 6¾p, or 1.3 per cent, to close at 516½p.
