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British oil major BP on Tuesday reported stronger-than-expected third-quarter profit.

The energy firm posted underlying replacement cost profit, used as a proxy for net profit, of $2.3 billion for the July-September period. That beat analyst expectations of $2.1 billion, according to an LSEG-compiled consensus.

BP reported net profit of $2.8 billion for the second quarter of the year and $3.3 billion for the third quarter of 2023.

Shares of London-listed BP have fallen over 14% year-to-date, underperforming its European rivals as investors continue to question the firm’s investment case.

BP’s third-quarter results come shortly after reports emerged the company scrapped its pledge to reduce oil and gas production by 2030, rolling back a core tenet of the firm’s ambition to achieve net zero emissions by the middle of the century — or sooner.

The move, reported by Reuters on Oct. 7, citing three unnamed sources, would be viewed as further evidence of CEO Murray Auchincloss’s plan to prioritize near-term returns from the firm’s more profitable fossil fuel operations.

BP was also said to be targeting several new investments in the Middle East and the Gulf of Mexico to boost oil and gas output, the news agency reported.

A BP spokesperson told CNBC: “As Murray said at the start of year in our fourth quarter results, the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company.”

Britain’s Shell

and France’s TotalEnergies

are scheduled to report quarterly results on Thursday, with U.S. majors Exxon Mobil

and Chevron

set to follow suit on Friday.

Last week, Norwegian oil and gas producer Equinor reported a 13% drop in adjusted operating income in the July-September period, missing analyst expectations.

EARNINGS

British oil giant BP posts $2.3 billion in third-quarter profit, beating expectations

Onwards and Upwards

Yehaaaaaaaaaaaaaaaaaa

10m ago (23:30 GMT)

US ‘complicit in Israeli aggression’: Iran’s UN envoy

Amir Saeid Iravani has told the UN’s Security Council that the US government is “complicit in Israeli aggression and will bear its consequences”.

The envoy also said that Iran “reserves its inherent right to respond at a time of its choosing” to Israel’s attack on Saturday.

I am looking into my crystal ball

mmm a bit foggy

But in the fog I see the words onwards and upwards✈️

Good luck all☘️☘️

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Go morning Jakers hope you are well

Weather 🌂

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BP is scheduled to report lower third-quarter earnings amid weak oil prices and refining margin. Here is what you need to know before the British energy giant publishes its results on Tuesday:

SALES FORECAST: BP is expected to book $48.21 billion in total revenue for the third quarter, according to consensus compiled by Visible Alpha. For the same period last year, BP reported $54.02 billion.

PROFIT FORECAST: BP is expected to post an underlying replacement-cost profit of $2.05 billion in the quarter, according to a company-provided consensus. This would be a decline from last year's third-quarter result of $3.29 billion. Underlying RC profit is BP's main metric and is similar to net income reported by U.S. oil companies.

BP shares have underperformed the STOXX 600 Europe Oil & Gas index this year, falling around 13% versus the index's 3.6% decline, due to uncertainty around its strategic direction and a weaker balance sheet than those of its peers.

WHAT TO WATCH

-- Given weakness in oil prices and refining margins, which has been flagged by BP ahead of the results, analysts and market watchers will likely look at BP's earnings mix. Its oil production and operations unit--the main profit center--reported $3.43 billion in underlying RC profit before interest and tax in last year's third quarter, while its customers and productions unit booked $2.055 billion.

-- Analysts and shareholders will also look to BP's balance sheet and cash flow, both of which can facilitate cash returns. The weak commodity market could lead BP to prioritize protecting its balance sheet and controlling its debt rather than focus on distributions, RBC Capital Markets said in a recent note. Concerns have been circulating around its ability to maintain shareholder payouts. However, RBC doesn't see BP changing its current guidance of $1.75 billion a quarter in buybacks.

-- A recent Reuters report said that BP would further scale back its low-carbon ambitions and move away from its prior target to lower hydrocarbon production to 2 million barrels of oil-equivalent by 2030. RBC expects these topics to be a continued focus for the investment case, and for BP to give hints on the strategy ahead of a full update in February, the Canadian bank said in a note.

Https://www.msn.com/en-us/money/topstocks/key-factors-to-consider-before-bp-s-q3-earnings-announcement/ar-AA1sNsC0

Https://www.timesofisrael.com/iran-readying-for-war-with-israel-as-it-braces-for-response-to-missile-attack-nyt/

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Https://oilprice.com/Latest-Energy-News/World-News/Oil-Steady-Despite-Crude-Inventory-Build.html

Port Workers’ Strike Threaten to Disrupt Brazilian Ports. Brazil’s National Federation of Dockworkers, Repair Workers, and Port Security launched a nationwide strike to protest against recent changes to the country’s labor law, delaying operations at both export and import terminals.

Future of US Hydrogen Hinges on Tax Credits. Darren Woods, the CEO of US oil major ExxonMobil (NYSE:XOM), stated that the company would scrapped its flagship Baytown hydrogen and ammonia plant in Texas is US federal hydrogen tax credits are not implemented in a technology-neutral way.

China Builds Inventory When It Shouldn’t. As China’s refinery runs posted the sixth consecutive year-on-year decline, averaging 14.29 million b/d, the Asian nation’s refiners have started to build inventory as the pace of imports and domestic production exceeded demand by 930,000 b/d.

Argentina Builds Oil Pipeline to Chile. Amidst continuously increasing Argentinian oil production from its shale Vaca Muerta play, the country’s leading producer YPF (NYSE:YPF) completed a 160,000 b/d pipeline to Chile that would feed ENAP’s Bio Bio refinery on the Pacific Coast with light crude.

Cuba Restoring Power After Multi-Day Blackout. Electricity supply across all of Cuba has been heavily restricted after the island country entered its third day of widespread blackouts, as Tropical Storm Oscar damaged power lines and lowered generation capacity to just 700 MW, a quarter of a day’s demand.

Hybrids Come to Dominate European Car Sales. Hybrids surpassed petrol-powered automobiles in EU new car sales for the first time on record last month, accounting for 32.8% of the 809,163 vehicles sold in September, benefitting from a 6% year-over-year decline in total registrations.

Oil prices were rising on Tuesday morning, even though Israel’s retaliation against Iran is yet to materialize. Hopes of a recovery in Chinese demand for crude have been pushing prices higher, with ICE Brent trading at over $75 per barrel. In the coming week, a combination of geopolitics and new macroeconomic data will likely decide where crude goes next.

Saudi Aramco Pins Hopes on Chinese Recovery. Amin Nasser, the top executive of Saudi Aramco (TADAWUL:2222), reiterated his belief in the strength of the Chinese market, saying Aramco still wants to increase its liquids-to-chemicals capacity to 4 million b/d, with a focus on China.

Canada’s CNR Takes on More TMX Exposure. Canada’s largest oil producer Canadian Natural Resources (TSO:CNQ) has reportedly taken over the 20-year term contract of PetroChina to ship oil via the 590,000 b/d TMX pipeline, increasing its total allocation by about 75% to 164,000 b/d.

Industry Warns of Delays in Next Wave of LNG Supply. French energy firm TotalEnergies (NYSE:TTE) predicted that the next wave of LNG supply would only come online from 2027, later than the earlier forecast of 2025, due to project delays, including its very own Papua LNG project.

IEA Expects Southeast Asian Demand to Soar. Despite a bearish outlook on global oil demand in general, the International Energy Agency expects Southeast Asia’s consumption to increase from 5 million b/d to 7 million b/d by 2050, second only to India in contributing to global energy growth.

Maduro Arrests Oil Minister on Treason Charges. Venezuela’s President Nicolas Maduro arrested Pedro Tellechea, the former oil minister of the country, after an ’exhaustive probe’ for serious crimes against the country’s highest interests.

Sudan Ready to Resume Exports After Repairs. The government of Sudan expressed its readiness to resume exports of South Sudan’s heavy sweet Dar Blend crude, shut in since February 2024 after clashes between government forces and the RSF militias damaged and ruptured the 100,000 b/d Petrodar pipeline.

India Expands LNG Import Capacity. India’s Hindustan Petroleum (NSE:HINDPETRO) is reportedly in the market to buy the first-ever cargo for its soon-to-be-commissioned 5 mtpa capacity LNG import terminal in Chhara, western India, as previous attempts to launch it earlier failed due to bad weather.

Oil markets have kicked off the new week on a strong footing with oil prices climbing after Chinese banks adopted extra stimulus measures in a bid to spur economic growth. Brent crude for December delivery gained 2.01% to trade at $74.53 per barrel at 13.53 pm ET, while WTI crude for November delivery was up 2.61% to trade at $71.03 per barrel.

Last month, the PBOC cut banks' reserve requirement ratio by 50 basis points and the benchmark seven-day reverse repo rate by 20 basis points, the most aggressive stimulus since the pandemic.

Chinese banks built on that on Monday by cutting their benchmark lending rates by a more than-expected 25 bp, a move expected to stimulate economic growth and boost energy demand by the world’s largest oil importer. The one-year loan prime rate (LPR) was lowered to 3.10% from 3.35%, surpassing expectations of a 20-bp cut while the five-year LPR was lowered to 3.60% from 3.85%, also higher than expectations of a 20-bp cut.

Weak oil demand by China has been playing a major role in the ongoing bearish sentiment in oil markets. Bloomberg estimates that total Chinese oil demand this year (Jan-Sep) is down -3.8% y/y to 13.99 million bpd.

Last week, the oil price rally reversed again thanks to a bearish economic report coming from China. China’s inflation data for September showed that consumer prices increased by a modest 0.4%, falling short of economist expectations of 0.6%. This marked the slowest price increase in three months, Reuters noted in its report. Whereas lower consumer prices are normally considered bullish for oil prices, the experts are interpreting China’s slowing inflation as a reflection of weaker demand that will continue to weaken as inflation slows.

“China faces persistent deflationary pressure due to weak domestic demand. The change of fiscal policy stance as indicated by the press conference yesterday (Saturday) would help to deal with such problems,” the chief economist of Hong Kong-based Pinpoint Asset Management told Reuters.

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