BP Profits Hit by Lower Oil Price

Oil giant BP has reported a fall in profits due to lower oil and gas prices.

Replacement cost profit between July and September was $1.23bn (£802m), compared with $2.38bn a year earlier. Total revenue was $55.9bn against $94.8bn a year ago.

The oil price dipped below $50 a barrel in the quarter, while it was above $100 for much of the same period last year.

Prices have dropped due to oversupply and weaker demand.

On an underlying basis, profit for the third quarter was $1.8bn, down from $3bn a year earlier but higher than analysts’ estimates of $1.2bn. BP shares opened almost 2% higher, but by mid-afternoon were down 1% on the day.

Replacement cost profit is a standard measure used in the oil industry that takes into account the price of oil.

Reflecting the tougher environment across the industry, the company’s capital expenditure for the period fell to $4.3bn, down from $5.3bn. BP continued to rein in spending estimates for 2015, which it now expects to be about $19bn compared with the $24bn-$26bn forecast a year ago.

via BBC

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