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BP profit drop despite oil price pick up

Tuesday, February 07, 2017 - 01:36

BP raised the oil price at which it can balance its books this year to $60 a barrel on Tuesday due to higher spending following a string of investments as annual earnings fell for a second consecutive year. Laura Frykberg repots

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Oil prices may have picked up, but BP's profits are yet to follow suit. The oil giant's annual earnings have plummeted for a second consecutive year. Net profit slumped to just over 2.5 billion dollars, while fourth-quarter earnings came in short of expectations. BP says it can't balance its books unless oil prices hit $60 a barrel - last year the average price was $44 - the lowest in 12 years. (SOUNDBITE) (ENGLISH) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "The rebound in the oil price hasn't had the significantly positive efffect that an awful lot of people were expecting it would do. There are concerns on the margins that BP's dividend - which comes in at 6 percent - could be at risk unless the oil price moves significantly higher." BP's not the only player under the pump. Other majors have also missed their forecasts. An overhang - say some - of spending too much when oil prices were higher. (SOUNDBITE) (ENGLISH) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "If we look at last week Chevron posted numbers that were disappointing as did Exxonmobil. And ultimately despite the rebound in oil prices, revenues are struggling to keep up" But BP is still taking the spend to grow approach. Securing a string of investments in recent weeks. With the aim increasing oil production by 800,000 barrels per by the end of the decade. Whether that pays off may depend on demand in an ever-changing market.

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BP profit drop despite oil price pick up

Tuesday, February 07, 2017 - 01:36