BP sees Q2 hit from weak oil, gas prices; Production up

BP on Friday said second-quarter earnings would be hit by weaker oil and gas prices, despite a rise in reported upstream production compared to the previous three months.

Gas & low carbon energy segment, realisations, compared to the prior quarter, are expected to have an impact in the range of $100 - 300m, the company said in a quarterly trading update.

In the oil production & operations segment, quarter on quarter realisations are expected to have an impact in the range of $600 - 800m, including the production mix effects and the price lags on BP's production in the Gulf of Mexico and the UAE.

BP said crude oil prices averaged $67.88 a barrel in the second quarter, compared with $75.73 a barrel in the prior three months.

The energy giant's gas trading result is forecast to be average, although no details were provided. Average refining margins in the quarter are expected to rise to $21.1 a barrel from $15.2 a barrel.

Meanwhile the customers and products business was tipped set to benefit from those higher margins by $300m - $500m compared to the previous quarter, despite higher maintenance activity.

Reporting by Frank Prenesti for Sharecast.com