Brent crude, the benchmark for global oil, fell 34 percent in 2015 and hit a 12-year low of $27.10 a barrel in January.
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Some of those spending reductions come from lower oil-equipment costs as it renegotiates contracts with service companies.
West Texas Intermediate futures rose as much as 2.6 percent, extending a 3.3 percent gain Tuesday.
Meanwhile, The World Bank said that demand will pick up this year along with a further fall in United States output in the second half of 2016, boosting its forecast for oil prices this year.
“Sentiment continues to improve, with major producer BP suggesting the markets may rebalance by the end of the year”, ANZ bank said on Wednesday.
Once all one-off costs and taxes are accounted for, BP reported a net loss of $583 million, compared with net income of $2.6 billion a year earlier. This lowers the price at which BP’s operations break even, with the company pointing to $50-$55 a barrel by 2017. Goldman Sachs, which had predicted BP would make an underlying loss of $264 million for the first quarter described the results as “strong.with both upstream and downstream beating consensus expectations”.
The upstream business, including exploration and production, posted a loss of $747 million after a profit of $604 million in the first quarter of 2015.
A persistent surplus in the market has pushed prices from more than $100 a barrel in 2014 to under $30 a barrel earlier this year.
“With crude inventories building and the Saudis still pumping at record levels, we feel the recent run-up has been mainly fuelled by the weakness on the dollar”, said Tariq Zahir, trader and portfolio manager at Tyche Capital Advisors in NY.
Crude markets got off to a rousing start in the NY session as gasoline futures and gasoline refinery margins both surged from refinery outages, Venezuela buying and a reported drop in NY inventories.
Earlier this year, a U.S. federal court ordered BP to pay over $20 billion to settle a lawsuit on the deadly 2010 oil spill in the Gulf of Mexico.
Faced with the worst downturn in the oil sector in at least three decades, BP reduced its capital spending three times in 2015 to US$19 billion, slashed almost 10% of its around 80,000 workforce and sharply lowered costs.
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Chief executive Bob Dudley, who has faced a shareholder rebellion over pay, said lower costs throughout the group more than offset falls in oil & gas prices and refining margins.
