bp warns of 2Q profit hit from weak refining margins, oil trading
British energy giant bp said on Tuesday that weak refining margins and oil trading were likely to dent its 2Q profit, sending its shares down 3% in morning trading.
While its refining margins will take a hit of $500 MM–$700 MM, the London-based company also expects to record $1 B–$2 B in charges in 2Q, mainly tied to its review of Gelsenkirchen refinery in Germany.
Last week, rival Shell said it would take an impairment charge of up to $2 B relating to the sale of its Singapore refinery and the pause of construction at one of Europe's largest biofuel plants in the Netherlands.
bp's earnings snapshot comes after U.S. oil major Exxon Mobil signaled on Monday that lower refining margins and natural gas prices would hurt its 2Q profit.
bp, which is set to post its quarterly results on July 30, said its upstream production in 2Q is expected to be broadly flat compared with the prior three months.
Oil and gas production stood at 2.38 MMbpd of oil equivalent in 1Q, thanks to field start-ups in Azerbaijan and the United States.
Investors expect bp's 2Q underlying replacement cost profit, the company's definition of net income, to come in at $3.13 B, according to LSEG data.
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