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London - BP reported a 80% decline in first-quarter earnings as crude oil prices continued to slide and a mild winter weighed on refining margins.
Profit adjusted for one-time items and inventory changes fell to $532m from $2.6bn a year earlier, the London-based company said in a statement Tuesday. Analysts had expected a loss of $244.9m, according to the average of 12 estimates compiled by Bloomberg.
The average price of Brent crude, the global benchmark, slumped to the lowest in almost 12 years in the quarter. That hampered efforts by CEO Bob Dudley to boost earnings even after he trimmed billions of dollars of spending, cut thousands of jobs and deferred projects to weather the market rout.
BP’s quarterly results, the first among the world’s oil majors, are likely to be an indication of how the others will perform.
Brent’s decline below $28 a barrel in January made crude cheaper for BP’s refineries, yet weak fuel demand during a mild winter in Europe and the US drove down refining margins. Global processing margins dropped to $10.50 a barrel in the first quarter, 31% lower than a year earlier and 20% lower than the preceding quarter, according to data on BP’s website.
Oil has rallied since then, rising above $45 as US crude production slows and major producers including Saudi Arabia study a possible cap on output. The increase in prices has pushed up BP’s shares 1.8% this year after a 14% decline in 2015.
The company started cutting costs and selling assets following the 2010 oil spill in the Gulf of Mexico. In October, it lowered its 2015 capital-spending forecast to about $19bn after investing about $23bn in 2014. BP said then it expects to spend $17bn to $19bn a year through 2017.
Total SA is scheduled to publish first-quarter earnings on Wednesday. Exxon Mobil and Chevron will announce results on April 29 and Royal Dutch Shell on May 4.
