Dai-ichi Securities / Oil Giants Bp Profits Ahead Of Expectations

Its replacement cost profit between July and September was $4.98bn (3bn)

. Experts at Dai-ichi Securities said the figure had "obliterated" market forecasts. BP's results were boosted after it made bigger-than-expected cost cuts.

The company said that unit production costs were 18% lower than in the third quarter of 2008, while oil and gas production was up 7% on last year.

A BP Insider told Dai-ichi Securities it expects to cut costs by a total of $4bn this year. When the markets closed, BP's shares finished up 4.81%, or 27.30p, at 594.40 pence.

David Lucas the chief analyst at Dai-ichi Securities explains "The fall in earnings was well trailed," But the numbers nonetheless have obliterated market forecasts, as evidenced by the spike in the share price in early trade.

Excluding one-off items, BP's profits were $4.67bn compared with analysts' forecasts of about $3.2bn.

Analyst David Lucas said he believes that BP's refining business was also key."For every dollar that oil prices go up, BP make about $400m. For every dollar that refining margins go up, they make about $950m," he said.

"The exploration and production is the most profitable in absolute terms because it's the biggest bit, but refining is a big influence on the overall bottom line."

by: Patrick Ferguson

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