BP Stock Surges After Energy Giant Records $8.5 Billion Quarterly Profit

Text size

BP

is the latest oil supermajor to post its most profitable quarter in years, joining

Exxon Mobil

and

Chevron

in benefiting from soaring energy prices.

BP

(ticker: BP) credited “exceptional” oil trading and strong refining margins for its adjusted profit to surge to $8.5 billion, up from $2.8 billion in the same period the previous year and well ahead of analysts’ forecasts. It recorded profit of $6.2 billion in the first quarter.

BP shares rose 4.1% in London. American depositary receipts of BP jumped 2.7%.

BP was one of Barron’s top picks for 2022.

Big oil has benefited from soaring energy prices as economies have rebounded and demand has boomed post-Covid, and a restriction of supply due to sanctions on Russia following its invasion of Ukraine.

It’s a stark contrast to the fortunes of the oil industry during the pandemic which suffered when lockdowns caused demand to slump, manufacturing to slow, and energy prices to tumble.

BP also raised its dividend by 10% and announced a further buyback of $3.5 billion of stock. It also has allowed for $800 million to cover a new levy on the profits of U.K. oil and gas proposed by the U.K. government last month.

BP said in a statement it expects “oil prices to remain elevated in the third quarter due to ongoing disruption to Russian supply, reduced levels of spare capacity and with inventory levels significantly below the five year average.”

Last week, rival

Shell

(SHEL) also saw strong performance in its refining and gas trading divisions, which led to a doubling of second -quarter adjusted earnings to $11.5 billion.

Exxon

Mobil (XOM) on Friday said soaring energy prices and increased production helped it shatter a previous record for quarterly profit, while

Chevron

(CVX) boosted its forecast for stock buybacks, and also turned in solid earnings.

Write to Rupert Steiner at [email protected]