BP hopes to avoid Shell’s expectation miss as it reports profits
The oil giant is expected to show about £3.5 billion in profit for the second quarter
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Your support makes all the difference.BP will be hoping it can avoid the fate of its fellow London rival Shell on Tuesday, when the oil major discloses how profitable it was in the second quarter of the year.
Analysts expect the oil giant to unveil billions of dollars in profit. But shareholders might be nervously eyeing Shell’s results announcement on Thursday ahead of the BP report.
Shell reported a 5.1 billion dollar profit (£3.9 billion) in adjusted earnings, showing that its finances are returning closer to pre-energy crisis times.
But that was half a billion pounds lower than the 5.6 billion dollars (£4.3 billion) that the company’s analysts had expected it to make.
Analysts already expect BP to make less money, about 3.5 billion dollars (£2.7 billion) in underlying replacement cost profit, but investors might hope that it will not miss those expectations.
Shell said that its profit had reduced due to it receiving lower prices for the oil and gas that it sells.
The business also reported lower margins at its refining unit, sold less liquid natural gas than the quarter before – LNG is generally more popular when it is winter in the northern hemisphere – and its LNG trading business also fared worse.
The fates of both companies often track each other closely. In May both companies reported expectation-beating profits, Shell by £1.4 billion and BP by about half a billion pounds.
Then, as now, their profits sparked calls for more to be done to ensure that the windfall from higher energy prices that were sparked by Russia’s full-scale attack on Ukraine does not benefit oil companies while ordinary people suffer.
Labour and the Liberal Democrats on Thursday called for changes to the windfall tax after Shell and British Gas owner Centrica announced their results.
It is likely that the same will happen on Tuesday when BP reports.