BP share price steady ahead of group’s third-quarter update

Higher crude prices expected to have boosted profits at oil major

BP share price steady ahead of group’s third-quarter update

Shares in BP (LON:BP) have climbed into positive territory in today’s session, holding steady ahead of the oil major’s third quarter update tomorrow. The FTSE 100 company is expected to post a rise in profits, having benefitted from stronger crude prices.

As of 14:06 BST, BP’s share price had added 0.28 percent to 499.30p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.19 percent worse off at 7,490.97 points. The group’s shares have added more than one percent to their value over the past year, but are down by just under two percent in the year-to-date.

BP to post rise in profits

BP is scheduled to post its third-quarter results tomorrow and City A.M. reports that the oil major’s profits are expected to have climbed to $1.5 billion (£1.1 billion) during the reported period. The company is expected to have benefitted from a rise in crude prices, with Brent having grown around 20 percent in the third quarter.

The newswire quoted Russ Mould, investment director at AJ Bell, as saying that BP would likely steer investors towards the replacement cost pre-tax profit metric, which excludes the change in value of inventory to “try and smooth out some of the effect of movements in oil and gas prices”.

“In the third quarter of 2016 BP made a replacement cost profit of $1.6 billion (and in Q2 2017 this figure was $565 million, although on an adjusted – before bad stuff – basis those numbers were $1.1 billion in Q3 2016 and $2.2 billion in Q2 2017),” Mould pointed out.

‘Most positively exposed’

Proactive Investors meanwhile quoted RBC Capital analyst Biraj Borkhataria as arguing in a recent note that BP was the ‘most positively exposed’ with regards to the refining story and that investors may also expect ‘materially lower’ impacts related to the Deepwater Horizon disaster. 

As of 14:45 GMT, Monday, 30 October, BP plc share price is 500.92p.

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