BP PLC was the latest big oil company to report a sharp increase in profit in the first quarter Tuesday, adding to optimism that the sector may have endured the worst of a dramatic slump in prices.
The British oil giant said it swung to a profit in the first quarter, benefiting from a roughly 60% increase in prices since the first quarter of 2016 compared with a year earlier and higher production volumes.
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The results are the latest a flurry of positive earnings reports by the world's biggest oil companies, several of which have enjoyed their most successful quarter in more than a year. The sharp improvement in financial performance has left investors hopeful that the sector may be on the path to recovery after struggling to come to grips with a sharp drop in oil prices since the summer of 2014.
Last week, Exxon Mobil Corp. reported its best quarter since 2015. Chevron Corp. posted a profit of $2.7 billion, after reporting a loss for 2016 and France's Total SA saw its profit surge 77% in the first three months of the year. Royal Dutch Shell PLC is due to report later this week.
BP said Tuesday its replacement cost profit--a number analogous to the net income that U.S. oil companies report--was $1.4 billion in the first quarter, compared with a loss of $485 million in the same period a year earlier.
The company's operating cash flow excluding payments related to the company's fatal Gulf of Mexico blowout in 2010 improved to $4.4 billion in the first quarter, helping the company maintain its dividend at 10 cents per share and reassuring investors, who received a jolt in February when the company said it would need oil prices to rise to $60 a barrel to break even this year.
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(END) Dow Jones Newswires
May 02, 2017 03:11 ET (07:11 GMT)