BP warns of ‘tight’ gas market ahead as profits surge

Nov 1, 2021, 2:21 PM | Updated: Nov 2, 2021, 7:23 am
FILE - The logo of British Petroleum, BP, adorns a petrol station in west London, Aug. 4, 2020. Soa...

FILE - The logo of British Petroleum, BP, adorns a petrol station in west London, Aug. 4, 2020. Soaring oil and gas prices tied to the global economic recovery from the coronavirus pandemic helped bolster British oil giant BP's third-quarter profits, the company said Tuesday Nov. 2, 2021 (AP Photo/Alastair Grant, File)

(AP Photo/Alastair Grant, File)

LONDON (AP) — BP reported soaring profits Tuesday on the back of surging oil and gas prices as the global economy recovers from the coronavirus pandemic. The British energy giant also warned that gas markets would remain “tight” over the coming months, which will likely further pressure household budgets.

BP said its underlying replacement cost profits — the industry standard — jumped to $3.3 billion in the three months ending in September, up from just $86 million in the same period a year earlier, when oil prices had slumped because of the pandemic. The third-quarter figure also was an increase of 18% from the previous quarter’s $2.8 billion and ahead of analysts’ expectations of about $3.1 billion.

“This has been another good quarter for BP — our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations,” BP chief executive Bernard Looney said.

Despite the headline profit increase, the company’s share price fell around 2% as it took a $6.1 billion hit primarily from the accounting treatment of soaring gas prices in futures markets.

“BP’s shares are on the slide thanks to a messy set of third-quarter numbers, marred, just like those of Shell, by accounting losses linked to hedging oil and gas prices,” said Russ Mould, investment director at A.J. Bell.

With its underlying finances in better health, the company said it would reward shareholders with a $1.25 billion share-buyback program, which it said will be completed before it announces its full-year results.

Analysts questioned whether that was a good use of money, especially as world leaders have gathered in the Scottish city of Glasgow for a U.N. climate summit known as COP26 where the focus is on how to reduce carbon emissions.

“Generosity in good times is all well and good, but that shouldn’t come at the expense of long-term financial stability, particularly given the considerable spending on renewable and low-carbon projects that’s likely over the coming years,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown in London.

For now, it’s clear that the oil business can be extremely lucrative if the price backdrop is favorable. Like others in the sector, BP has benefited from rising oil and gas prices in recent months, compared with last year when they fell sharply following the onset of the pandemic.

The company said it expected gas supply “will remain tight during the period of peak winter demand” and that oil prices will hold steady as inventory levels are drawn down and customers switch from gas to oil given the sharper price increases in wholesale gas markets.

The surging oil and gas prices in recent months have hit people’s incomes around the world, with energy bills at home and at the pump rising sharply from a year ago.

BP said that if the international Brent crude oil measure remains above $60 a barrel, it should be able to buy back around $1 billion shares each quarter and increase its dividend by 4% annually through 2025.

It also said it has continued paying down its debt, which had jumped in early 2020 amid the oil price collapse. Its net debt stood at $32 billion, down from $32.7 billion at the end of the second quarter.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Florida deputy, one of department’s youngest, fatally shot

POLK CITY, Fla. (AP) — A 21-year deputy was fatally shot Tuesday while serving a warrant in central Florida, authorities said. The deputy was shot after entering a trailer in the early morning with three other deputies to serve a warrant on a suspect wanted for failing to appear on a felony drug charge, said […]
1 day ago
Associated Press

Turkish journalist groups slam bill to fight disinformation

ANKARA, Turkey (AP) — Turkish journalists groups on Tuesday protested a draft law the government says is aimed at combating fake news and disinformation but which critics denounce as yet another attempt to stifle freedom of expression. Parliament was set to debate a 40-article piece of legislation that amends multiple laws governing press, advertising and […]
1 day ago
Associated Press

The AP Interview: Ukraine aims to restart occupied reactors

KYIV, Ukraine (AP) — The head of the company operating Europe’s largest nuclear plant, which is occupied by Russian troops, says Ukraine is considering restarting the facility to ensure its safety — just weeks after fears of a radiation disaster prompted its shutdown. Run by Ukrainian state nuclear company Energoatom, the Zaporizhzhia plant is one […]
1 day ago
FILE - Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenhe...
Associated Press

Musk’s plan to end Russian war infuriates Ukraine on Twitter

Elon Musk has gotten into a Twitter tussle with Ukrainian President Volodymyr Zelenskyy after the tech billionaire floated a divisive proposal to end Russia’s invasion. The Tesla CEO, soon facing a court fight over his attempt to abandon a $44 billion offer to buy Twitter, argued in a tweet Monday that to reach peace Russia […]
1 day ago
A family serve themselves lunch at the Chabad Lubavitch of Southwest Florida, Monday, Oct. 3, 2022,...
Associated Press

Amid Ian’s wounds, Jews see healing, renewal in Yom Kippur

FORT MYERS, Fla. (AP) — Even though a destructive hurricane tore through his community just days earlier, nothing was going to stop Rabbi Yitzchok Minkowicz from holding prayer services Tuesday night for the start of the holiest day on the Jewish calendar. Throughout a southwest Florida devastated by Hurricane Ian, Jews planned to hold worship […]
1 day ago
A statue of Vladimir Lenin is removed from the streets of the city of Kotka, Finland Tuesday, Oct. ...
Associated Press

Finnish city removes last publicly displayed statue of Lenin

HELSINKI (AP) — A city in southeastern Finland on Tuesday removed the country’s last publicly displayed statue of Russian revolutionary leader Vladimir Lenin following pressure from residents in the wake of Russia’s war in Ukraine. A group of construction workers in Kotka, a port city of 52,000 not far from the border with Russia, hoisted […]
1 day ago

Sponsored Articles

Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
BP warns of ‘tight’ gas market ahead as profits surge