BP warns weak refining margins to hit Q3 profit
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BP followed sector rival Shell and said it expected a fall in third-quarter refining margins would hit operating profit by $400 – 600m and also warned its oil trading result would be weak as it felt the impact of lower crude prices.
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Upstream production in the third quarter was now expected to be broadly flat compared to the prior three months, with output broadly flat in oil, gas & low carbon energy, the company said in a trading statement on Friday.
The oil production and operations unit third-quarter result would be impacted by $100-$300m.
Net debt was also forecast to be higher, driven primarily by the impact of weaker refining margins and by the rephasing of around $1bn of divestment proceeds into the fourth quarter.
Shell and US giant Exxon both issued similar warnings in recent days as global oil refiners face lower earnings amid weaker demand from major clients such as China and a move towards electric vehicles.
Reporting by Frank Prenesti for Sharecast.com