BP. As noted by Waghpanje (n.d.), fluctuations in gross refining margins (GRM) have a direct correlation with the financial performance of such entities. In BP's case, lower GRM levels directly resulted from decreased demand and oversupply in the market, leading to compressed earnings.
Profits for thre first nine months of the year are down from $10.85 billion to $7.45 billion.
The results come against a backdrop of weaker oil prices and investor discontent with management strategy. The shares are down around 15% this year.
Middle East can avoid an all out war that would restrict production, as well as an OPEC downgrade of its forecast for global demand this year and next.
The firm’s third-quarter results were the weakest since the fourth quarter of 2020, when industry profits cratered during the coronavirus pandemic.
Murray Auchincloss, CEO of BP, said in a statement.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume. We also have a deep belief in the opportunity afforded by the energy transition – we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business.”
Chief financial officer Kate Thomson said: ”In the third quarter, we delivered an underlying replacement cost profit of $2.3 billion while continuing to transform our business. We are in action to deliver efficiencies and are confident in achieving at least $2 billion of cash cost* savings by the end of 2026 relative to 2023. Our financial frame is unchanged. Today, we are announcing a dividend of 8 cents per share and a $1.75 billion share buyback as part of our $3.5 billion commitment for the second half of 2024.
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