Oct 27, 2020 - Energy & Environment

BP ekes out profit despite pandemic's bite

Illustration of an oil barrel with a battery compartment, a hundred dollar bill is rolled into one of the battery sockets.

Illustration: Aïda Amer/Axios

BP reported an $86 million third-quarter profit Tuesday — a result that beat analysts' expectations but nonetheless signals how the pandemic is weighing heavily on the industry.

Why it matters: It's the first of several earnings reports this week from oil-and-gas giants that provide the latest window on COVID-19's ongoing effect. Shell reports Thursday and U.S. giants Chevron and Exxon report Friday.

By the numbers: BP's profit came after a $6.7 billion loss the prior quarter during the worst of the pandemic's price and demand impact.

  • "Compared to the previous quarter, the result benefitted from the absence of significant exploration write-offs and recovering oil and gas prices and demand," BP said.
  • However, this was "partly offset by a significantly lower oil trading result," BP said, also noting the "extremely weak environment" for refining.
  • The profit in the July-September period is far less than its $2.3 billion profit in Q3 of 2019.

The big picture: The industry's outlook remains tethered to COVID-19's path, even as energy demand is returning.

  • BP's report notes "early signs of global economic recovery" as restrictions have eased and governments provide economic stimulus.
  • "However, the shape and pace of the recovery is uncertain, as it depends on the further spread of the pandemic."
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