Market commentary

BP spent years trying to reinvent itself as an energy company, and this quarter it looks set to have made its money being a very good refinery. Oil prices slipped, but Middle East disruption sent refining margins soaring, though some of that looks to have been given back on the forecourt.

BP isn’t pumping much more oil and gas than it was a year ago. The company reported an earnings boost, but most of the help came from events outside its control, and if, or when, the Middle East calms down, refining margins could fall as fast as they rose.

Another $3bn to $4.5bn of expected write-downs, mostly on low-carbon businesses, shows the cost of transitioning away from a green focus. 

BP is on course to hit its net debt target more than a year early, which leaves its balance sheet in much better shape than it has been for years.

Attention now turns to BP’s strategy update in New York in December, Meg O’Neill’s first as chief executive. With the debt largely dealt with, shareholders will want to know what comes next, whether that’s bigger buybacks or a clear plan to grow production.

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