BP Warns Of Tight Gas Market Ahead While Profits Surge
British Petroleum (BP) reported soaring profits Tuesday on the back of surging oil and gas prices as the global economy recovers from the coronavirus pandemic.
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Yet, the British energy giant also warned that gas markets would remain “tight” over the coming months, which will likely further pressure household budgets, Pan Pylas reported for the Associated Press (AP).
BP said its underlying replacement cost profits — the industry standard — jumped to $3.3 billion in the three months ending in September, up from just $86 million in the same period a year earlier, when oil prices had slumped because of the pandemic.
The third-quarter figure also was an increase of 18% from the previous quarter’s $2.8 billion and ahead of analysts’ expectations of about $3.1 billion.
“This has been another good quarter for BP — our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations,” BP chief executive Bernard Looney said.
Despite the headline profit increase, the company’s share price fell around 2% as it took a $6.1 billion hit primarily from the accounting treatment of soaring gas prices in futures markets.
“BP’s shares are on the slide thanks to a messy set of third-quarter numbers, marred, just like those of Shell, by accounting losses linked to hedging oil and gas prices,” said Russ Mould, investment director at A.J. Bell.