BP and Shell both reported very strong updates for the first three months of the year as the energy giants saw profits of $5bn and $9.6bn respectively. As well as reaping the benefit of higher oil prices, BP generated a significant increase in revenue from trading in the international oil and gas market. Shell’s profits were sustained by a big increase in revenue from natural gas production and it promised to use its bumper profits to return cash to investors by increasing dividends and pledging an additional $4bn for share buybacks. BP has slowed the pace of its buyback as the price of oil and gas has been falling in recent weeks.
China’s return to growth was expected to support the price of oil but instead it has fallen steeply. Brent Crude was $82 a barrel at the beginning of January and was as high as $87 in early April, however, fears of recession caused this drop to $72 a barrel this week. This is despite Opec+ countries trying to keep prices high by agreeing a big production cut in April.
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