Shell, BP profits jump on record oil price
Written on April 30, 2008
Oil giants Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and BP (BP.L: Quote, Profile, Research) beat forecasts to post big rises in first quarter profits on Tuesday, lifting shares across the sector, as investors bet oil prices above $100/barrel would be an even bigger bonanza than expected.
Shell, the world’s No. 2 non government-controlled oil company by market capitalization, said net income, excluding unrealized gains from changes in inventory values, rose 12 percent to a record $7.8 billion.
Industry No. 3 BP said profits, calculated on the same basis, rose 48 percent to $6.6 billion.
“It’s an eye opener for investors, showing what the high commodity price environment really, really means in terms of earnings for the oil sector,” Paul Andriessen, oil analyst at Fortis Bank in Amsterdam.
Shell’s London-listed “B” shares rose 5.1 percent to 2021 pence by 4:51 a.m payday loan fastcash. EDT (0851 GMT), while BP’s rose 5.2 percent to 608-1/2 pence.
The DJ Stoxx European oil and gas sector index rose 2.9 percent, compared to a 0.1 percent drop in the FTSEurofirst 300 index of top European shares.
The oil majors’ core upstream, oil and gas production units were the main drivers of the bumper profits, thanks to record oil prices, which averaged almost $100/barrel during the quarter, and strong gas prices in the U.S. and Europe.
Oil and gas production was flat at both companies.
Filed in: economics.