London-based company said that while fuel demand in Asia, particularly in China, was recovering, global consumption remained weak so far in the fourth quarter. BP’s shares are down more than 50% this year and remain near 25-year lows, battered by weak oil prices and investor concerns about BP’s ability to successfully shift to renewable energy from fossil fuels. It is hard to imagine the environment being much more brutal than it was in the third quarter. BP reported a $86 million underlying replacement cost profit, the company’s definition of net income, for the three months to Sept. 30, beating analysts’ expectations of a loss of $120 million. It followed a record $6.7 billion loss in the previous quarter, when it also halved its dividend.
Weak fuel demand continued to weigh on refining profit margins, with BP refineries operating at 80% of capacity. Fuel demand remains around 15% below pre-crisis levels. BP’s refining margin of $6.20 per barrel was up slightly from the previous quarter but less than half of what it was a year earlier. Refining and trading typically help offset weak oil and gas prices. But BP and its peers hit a perfect storm this year when the coronavirus epidemic led to both sharp drops in oil and gas prices and fuel demand. BP expects to be resume buybacks in the fourth quarter of next year at the earliest.