BP PLC (LSE:BP.) has warned that weak refining margins and lower oil prices have affected its third-quarter numbers.
Exploration write-offs in the region of US£200-300 million will also hit the figures, said the oil and gas giant.
Oil and gas production over the three months is now expected to be broadly flat compared to the prior quarter, with higher gas prices giving a US$100 million boost offset by a US$100-300 million drop from its operations in the Gulf of Mexico and UAE.
Like Shell recently, BP also warned that refining margins had weakened, causing a reduction of US$400-600 million while oil trading had also been weak.
As a result, net debt will increase by the end of the quarter, primarily due to a lower refining contribution and the deferral of US$1 billion in divestment proceeds to the fourth quarter.
BP reported an average Brent sale price of $80.34 per barrel in the third quarter of 2024, compared to $84.97 per barrel in the previous three months.
Henry Hub gas prices averaged $2.15 per mmBtu, up from $1.89 per mmBtu, while refining margins decreased to $16.50 per barrel in the third quarter of 2024, down from $20.60 per barrel.
According to BP’s rules of thumb, each US$1 per barrel movement in crude price affects operating profits by US$340 million.
Similarly, each US$0.10 per mmBtu change in the Henry Hub gas price impacts profits by US$30 million, while each US$1 per barrel change in refining margin influences operating profits by US$400 million.