Brent crude, the benchmark for global oil, traded at $44.82 a barrel on Tuesday, up from the $34 a barrel average in the first quarter but down from $54 in the first quarter of 2015.
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PLC reported a loss for the second consecutive quarter Tuesday, as low oil prices continue to buffet the company’s financial performance.
In recent years, much of the profitability of major oil producers like BP has come from high oil prices.
BP shares opened 3 percent higher on the London Stock Exchange on Tuesday, the second-biggest gainer in the blue-chip FTSE 100 index.
It said spending fell to 11% year on year in the first quarter and was expected to reach 17 billion United States dollars (£11.7 billion) in 2016, but added it could cut this further to between 15 billion (£10.3 billion) and 17 billion dollars (£11.7 billion). BP has an existing target of organic spending of between $17 billion and $19 billion in 2016 and 2017, but has said that low prices threatened to derail its hopes of balancing its cash flows by 2017 assuming a Brent oil price of around $60/b.
“Despite the challenging environment, we are driving toward our near-term goal of rebalancing BP’s cash flows”, Chief Executive Bob Dudley said.
BP, Europe’s third-biggest oil company, in February said it will extend planned jobs cuts and keep its spending under review this year as the oil price slump forced a multi-billion dollar one-off charge in the fourth quarter of 2015.
“Operational performance is strong and our work to reset costs has considerable momentum and is delivering results”, he said.
Analysts had expected losses of 140 million U.S. dollars (£96 million).
“Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year”, added Dudley.
The dividend was held at 10 cents.
“Overall it’s a good set of figures as it looks like BP is getting costs under control to cope with a new low average (oil) price”, said Joe Rundle, head of trading at ETX Capital.
BP reported a net loss of $583 million.
The oil giant took a $917m charge for the 2010 Gulf of Mexico oil spill, taking the total to $56.4bn. But the company still faces additional civil litigation and ongoing costs related to the disaster, including an annual liability of around $1 billion imposed by the settlement that stretches out over roughly two decades.
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The London-listed energy group clocked up a loss of $6.5 billion previous year and recently announced plans to axe another 3,000 jobs, taking its total cull to 11,000 positions since the start of 2015.
