SHARE OF THE WEEK: BP set for upbeat results, but like Shell, is likely to come under fire at time when cost-of-living is spiralling
Shell faced a fierce backlash when it reported record quarterly profits of £9.5billion earlier this week.
So while BP will be hoping for a similarly upbeat set of results, it too is likely to come under fire at a time when prices at the petrol pumps are soaring and household energy bills head towards £500 a month.
Oil and gas explorers cashed in as the price of crude rose from pandemic lows of around $20 a barrel to over $100.
The reopening of economies from lockdowns lifted demand while Russia’s invasion of Ukraine sent prices higher still, driving up profits at BP, Shell and their international rivals.
This has led to share buybacks and increased dividends for shareholders, including millions of Britons with pensions.
But it has also pushed up the price of fuel and energy, sending inflation ever higher in a painful squeeze on family finances and business profits.
And it has also forced BP, Shell and others to quit Russia – a once-lucrative market. So all eyes will be on BP’s second-quarter results on Tuesday.
Laura Hoy, an equity analyst at Hargreaves Lansdown, said: ‘BP will continue to reap the reward of elevated oil prices in the second quarter with healthy profits expected.
‘BP has promised further share buybacks to the tune of $2.5billion (£2.1billion) in the second quarter, to return a portion of surplus cash flow to investors, though no shareholder returns are guaranteed.’
BP boss Bernard Looney will also, no doubt, trumpet the company’s drive towards renewable energy.