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BP beats third quarter estimates and returns to revenue on bettering oil demand

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A BP company logo is displayed on a fuel pump in the forecourt of a gas station operated by BP Plc in London, UK.

Chris Ratcliffe | Bloomberg | Getty Images

LONDON – Energy giant BP reported a small profit in the third quarter on Tuesday, beating analysts' expectations as the company benefited from stronger oil prices and the lack of significant exploration write-offs.

The underlying replacement cost gain for the third quarter, used to replace net income, was $ 100 million. That compared to a loss of $ 6.7 billion in the second quarter and a profit of $ 2.3 billion in the third quarter of 2019.

Refinitiv analysts had expected BP to post a loss of $ 347 million in the third quarter.

"Now that we have detailed our new strategy, our priority is execution. Despite a challenging environment, we are doing just that – performance during transformation," said Bernard Looney, CEO of BP, in a statement.

Looney said the company remains "firmly focused on cost and capital discipline" and "firmly committed" to its updated financial framework, including dividends.

BP's results are due to the fact that sentiment in the energy market remains subdued. A surge in coronavirus cases worldwide is hurting prospects for oil demand growth.

A wave of new Covid-19 infections has caused some countries to impose new restrictions this winter.

The international reference Brent crude oil futures were trading at $ 40.86 a barrel Tuesday morning, up around 1% for the session, while the U.S. West Texas Intermediate futures were up more at $ 38.94 than 0.9%.

Both contracts were down over 3% in the previous session.

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Steven Gregory