Better than forecast numbers from oil major BP are just as much an indication of how low expectations had fallen ahead of its third quarter update as a sign of tangible green shoots for the company’s recovery.
While better than the loss which had been pencilled in and a big improvement on the record loss posted for the second quarter, the uncomfortable truth is a huge amount of manpower, resources and effort was put into achieving a profit of less than $100 million.
“The recovery in oil demand which underpinned a return to profit may now be threatened again by a second wave in the Covid-19 pandemic,” said Russ Mould from AJ Bell.
“Probably the most significant achievement chalked up in the period was the reduction in net debt, with the divestment of its petrochemicals business to Ineos expected to provide a further injection of funds in the near future.
“BP faces the challenge of investing in a transition to a cleaner, greener future while keeping its balance sheet under control and maintaining dividend payments.
“There still seems to be healthy scepticism in the market about CEO Bernard Looney’s pledge to keep ‘performing while transforming’. Sooner or later it feels like something has to give and it seems likely the dividend will remain in question as far as investors are concerned for the foreseeable future.”