BP expects higher upstream output but flags weak oil trading
BP (BP.L) said it expects upstream oil and gas production to rise in the third quarter, reversing earlier guidance for a slight decline. However, the energy giant warned of weaker oil trading performance ahead of its November 4 results.
The company forecast higher output, particularly from U.S. onshore fields, though received gas prices were lower, and trading was described as “average.” Brent crude averaged $69.13 per barrel in Q3, up from $67.88 in Q2, News.Az reports, citing Reuters.
BP expects its refining margins to improve to $15.8 per barrel in Q3, compared with $11.9 in Q2, which should add $300–400 million to results. This boost may be partially offset by flood-related outages at its U.S. Whiting refinery and additional compliance costs.
The company anticipates impairments of around $181 million in oil exploration and total impairments of $200–500 million across other business segments. Net debt is expected to remain roughly $26 billion, flat with the previous quarter.
BP’s shares were down 1.5% on Tuesday morning, slightly above a broader European energy index fall of 1.4%.
Citi analysts noted:
“BP’s Q3 trading statement sees expected tailwinds from higher refining margins and operational uptime, partly offset by weaker oil trading.”
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