BP profits surge 71 percent amid oil cost rally

“I think what you’re seeing coming through those earning numbers will be an much better ramp-up of the projects … underlying production growth from the upstream of around 14 percent in addition to a resilient downstream,” Brian Gilvary, chief financial officer at BP, told CNBC’s “Squawk Box Europe” on Tuesday. Upstream will be classed as the exploration in addition to production aspects of the oil industry.

“So overall a strong set of results This specific quarter,” he added.

The latest figures come at a time when the environment for oil companies will be dramatically improving, amid signs the energy market will be rebalancing in addition to crude futures have rallied to multi-year highs.

The main driver for a recent uptick in oil prices has been a supply cut coming from major oil producing group OPEC in addition to its allied partners, who commenced to withhold output in January last year. The production cuts are scheduled to continue throughout 2018.

The move has helped to stabilize crude futures in addition to support oil companies in recent quarters. Brent crude traded at $74.81 a barrel on Tuesday morning, up 0.1 percent, while West Texas Intermediate (WTI) was at $68.71 a barrel, 0.2 percent higher.

“We expect improving earnings in addition to cash generation to show through early 2018 as BP captures higher commodity prices in addition to widening crude spreads,” Biraj Borkhataria, analyst at RBC Capital Markets, said in a research note Tuesday.

“We expect BP’s cash flow generation to improve This specific year, both on an absolute basis in addition to relative to peers. This specific should help improve confidence around BP’s dividend,” Borkhataria added.

On Thursday, Shell reported a 42 percent rise in profits during the first three months of the year, underpinned by a recent uptick in oil in addition to gas prices. The Anglo-Dutch firm said steady progress in its divestment program had helped the company beat analyst expectations, though some external observers were concerned about its cash flow generation.

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