Oil firms expected to reach record profits

British Petroleum (BP) and Royal Dutch Shell are both expected to announce record profits of around €4.7 billion on the week of Monday, July 24th amid record high oil prices.

A Reuters' poll of eleven analysts gave an average forecast of Eu4.71bn for BP’s replacement cost profit excluding one-off items. This is a 3% rise over the second quarter of 2005 and a record quarterly profit.
A poll of twelve analysts gave an average forecast of E4.84bn for smaller rival Shell’s second quarter current cost of supply CCS net income. This excludes non-operating items like gains from asset sales.

This would mean a 19% rise compared to the same period in 2005. It would mean a record underlying quarterly profit for the firm.
The results will be supported by strong oil prices which averaged at around $70 for the quarter. However the record profits hide falls in output. BP said earlier in July that its production of oil and gas fell 2.5% in the second quarter compared to the same period in 2005 to 4.01 million barrels of oil equivalent every day.

Shell production is thought to fall 6% over the same time to 3.3 million.