Johannesburg – BP Plc narrowly avoided a third-quarter loss, but warned there are many challenges ahead as the pace of recovery in oil demand remains uncertain.
The fuel company defied analyst expectations to eke out a small profit as a rebound in earnings from fuel marketing offset “extremely weak” refining margins. Yet the positive surprise may do little to change the gloomy outlook for Big Oil amid the coronavirus pandemic.
While crude prices have recovered from historic lows seen in April, BP’s profit was down96% from a year earlier as restrictions put in place to slow the spread of the coronavirus in Europe and the U.S. kept fuel demand at bay. The company warned of a “volatile and challenging trading environment” where “the shape and pace of the recovery is uncertain.”
It reported an adjusted net income of $86-million for the third quarter on Tuesday, down from $2.25billion a year earlier. That’s an improvement from the second quarter, when the company posted a $6.68 billion loss.
“Having set out our new strategy in detail, our priority is execution,” said Chief Executive Officer Bernard Looney in a statement. “Despite a challenging environment, we are doing just that.”
