Plunging oil prices knock BP profits

Oil giant BP said today that first-quarter profits slid 62% after oil prices slumped from last summer’s record level.

The decline to $2.39bn (€1.83bn) in the first three months of this year came as global oil prices dived below $50 (€38.40) a barrel, compared with the peak of $147 (€113) in July.

BP, which last year reported record annual profits of $25.6bn (€19.6bn), said profits more than halved at its exploration and production division, to $4.32bn (€3.32bn).

A year ago, BP and rival Royal Dutch Shell reported Q1 results on the same day and fuelled motorists’ anger over rising petrol prices by reporting a combined surplus of more than £7bn (€7.82bn).

Today’s update from BP was still stronger than market expectations, with the profit figure excluding one-off items coming in at $2.58bn (€2.88bn) – stronger than the $2.23bn (€2.49bn) forecast in the City.

There was further cheer for shareholders as BP announced a 4% increase in the company’s dividend payment. In sterling terms, the increase is 40%.

Analysts have expressed concern in recent months that, with oil prices falling, the company may be forced to stall dividend growth.

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