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The Scotsman: BP and Shell fail to make most of recent surge of record oil prices

VICTORIA THOMSON
 
A HEAVYWEIGHT week for corporate results will test the resolve of investors this week, with BP and GlaxoSmithKline among those due to provide updates.

Despite a run of record oil prices since mid-September, BP and Royal Dutch Shell are both expected to unveil lower profits after a tough quarter for the oil majors. They report after a warning from US oil giant Chevron, which said that third-quarter profits would slip from record levels achieved earlier this year.

Hargreaves Lansdown equities analyst Keith Bowman said: “Profit margins in the refining arena have been under pressure, whilst movements in currency markets have also proved unhelpful.”

BP is expected to report underlying post-tax profits of $3.96 billion (£1.93bn) for the third quarter tomorrow – around 30 per cent lower than last year.

The City is primed for the poor results after new chief executive Tony Hayward described the operating performance as “dreadful” to staff last month.

Shell, meanwhile, is set to fare slightly better with consensus forecasts putting profits at $5.64bn (£2.7bn) for the quarter – but this still represents a fall of nearly 20 per cent on the same period last year.

In the first half of the year, it said crude oil production was up 1 per cent. But gas production fell 6 per cent, reflecting reduced demand in north-west Europe and the impact of security problems in Nigeria.

The above is an extract. For the complete article go to…

http://business.scotsman.com/utilities.cfm?id=1680922007

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