May 2, 2017

BP profits surge after rebound in oil prices

BP almost tripled its profits in the first quarter, adding to signs of recovery among the world's biggest oil producers after a two-year slump. Like its US peers ExxonMobil and Chevron last week, BP beat market expectations with first-quarter results that showed the benefits of sharply higher oil prices compared with the 12-year lows recorded in the same period of 2016. BP is gradually rebuilding its portfolio after shedding assets accounting for a quarter of the group's oil and gas output to finance Deepwater Horizon liabilities. Alastair Syme, analyst at Citigroup, said that, while BP was gaining momentum, its combination of higher leverage and cash flow break-even point compared to rivals left its shares "More at risk . . . if oil prices fail to inflate". Mr Gilvary argued that reduced costs and rising production would continue to strengthen cash flow even without further increases in crude prices, which BP expected to remain within their current $50 to $55 per barrel range throughout 2017 because of high inventory levels.

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