British Petroleum shares rise after the oil company beats analysts forecasts as it grapples with weaker oil prices. Silvia Antonioli reports.
BP profits sink but its share fly higher. The oil giant was hit by an exploration write-off in Angola but its second quarter net income was way ahead of analysts' forecasts. SOUNDBITE (English) CRAIG ERLAM, SENIOR MARKETS ANALYST, OANDA: "I think the company is on a very long road to recovery and I think the early signs are positive but there are going to be little blips along the way." A rise in cash-flow from operations proved efforts to slash costs in response to weak oil prices are bearing fruit. And BP says it will continue to tighten the purse strings as CFO, Brian Gilvary, expects crude prices to stay below the 50-dollars a barrel mark, weighed down by growing volumes of U.S. shale. SOUNDBITE (English) CRAIG ERLAM, SENIOR MARKETS ANALYST, OANDA: "The downside for BP of course is that it's breakeven point is still much higher around 60 dollars a barrel compared to its peers. So this is going to be a continuing challenge for the company. But then there's other aspects of the company which are more positive things like the free cash flow with a higher dividend yields." BP itself is adding to the oil glut. It has increased its oil and gas production sharply and by the end of 2017 it will have launched 7 oil and gas projects- the largest yearly number in its history. adding to its output and to its competitors' worries too.