Trading Gains Saving from a Quarterly Loss

BP paired the payout news with more details for investors of its net-zero strategy — bringing forward announcements expected in September. It’s targeting a radical 40% decline in hydrocarbon production, a 10-fold increase in low-carbon investment and a leap in renewable-power capacity to around 50 gigawatts by 2030. It won’t explore for oil in any new countries. Net debt fell 20% from the previous quarter to $40.9 billion, while gearing — the ratio of debt to equity — dropped to 33.1% from 36.2%. Despite the decline, the level remains well above BP’s comfort range of 20%-30%. The company aims to reduce debt to $35 billion, at which point it plans to return at least 60% of surplus cash flow to shareholders via buybacks.

The oil major’s sprawling trading unit capitalized on the period’s volatility and in particular made money from so-called contango plays. That trade involves putting cheap oil into storage and simultaneously selling it at higher prices on the forward market. Total SE, Shell and Equinor ASA all reaped the benefits of contango, with trading gains saving them from a quarterly loss.

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