Derren Nathan, head of equity research at Hargreaves Lansdown, said: “BP’s new CEO, Meg O’ Neill’s, first address to investors came with a solid beat of upgraded profit expectations.
“While these are results that she’s inherited rather than influenced, it’s a good base to build from.
“The lion’s share of the $1.8billion uplift in headline profits came from the customers and products segment, which benefited from an exceptional oil trading result as customers scrambled to secure supplies following the closure of the Strait of Hormuz.
“Improved refining margins also boosted the outcome for this division.
“Oil production and operations saw profit dip, with the spike in crude prices likely to be better reflected in second-quarter numbers.
“However, since the year-end, net debt, a key area of investor focus, increased by over $3billion to $25.3billion due to the sharp build in working capital that comes with fast rising commodity prices.
“The duration of the conflict in the Middle East will be key to the outcome this year.
“Price volatility is the key variable, with total production in the region representing under 20 per cent of last year’s total.
“Given the high level of uncertainty, BP’s been cautious not to signal a step change in dividends and hasn’t dropped any clues about the likely return date of share buybacks.
“Still, the increased profitability has been enough to send the shares a few points higher this morning.
“There’s been no change to capex guidance, but markets will be watching closely for any signals about the new chief’s strategic direction in this afternoon’s analyst presentation.”
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