BP Plc, Europe’s second largest oil company, said “strong operations” at its refineries allowed the company to report a profit in the fourth quarter in the face of lower margins.
BP replacement cost profit before interest and tax in refining and marketing fell to $564 million in the quarter, down from $964 million in the same period last year, the company said today in a statement.
The refinery utilization was “well above the industry average,” BP said. “Our result benefited from an improved contribution from supply and trading relative to the fourth-quarter loss in 2010 and our ability to access West Texas Intermediate-priced crude grades in the U.S.”
Refining margins from processing oil into fuels such as gasoline and diesel on the U.S. Gulf coast fell 22 percent to $7.16 a barrel in the fourth quarter from a year earlier, according to BP data.
The refining industry “had the perfect storm” after fuel demand dropped in the U.S. and Europe in the last quarter, Royal Dutch Shell Plc Chief Executive Officer Peter Voser said last week. Shell had a loss of $278 million from its refining and marketing operations, compared with a profit of $482 million a year earlier.