BAKU, Azerbaijan, May 3. bp expects an ongoing elevated risk of oil price volatility, Trend reports with reference to the company.
“This reflects uncertainties around the level of disruption to Russian supply, the capacity for increased OPEC+ supply, the ongoing impact of COVID-19 on demand and the impact of the conflict in Ukraine on economic growth. bp expects the short-term outlook for gas prices to remain heavily dependent on Russian pipeline flows to Europe. In the second quarter of 2022, bp expects industry refining margins to remain elevated due to ongoing supply disruptions, particularly in Russia and Europe,” bp said in its latest report.
Looking ahead, bp expects second-quarter 2022 underlying upstream production to be lower than first-quarter 2022, primarily in gas and low carbon energy, reflecting base decline and seasonal maintenance. On a reported basis, second-quarter production will reflect additional impacts from the absence of production from our Russia incorporated joint ventures. In bp’s customers & products business, there is an elevated level of uncertainty due to the developing impacts from the conflict in Ukraine and ongoing COVID-19 restrictions. In addition, in Castrol, additive supplies are expected to remain under pressure. In refining, the company expects higher industry refining margins, although the increase in realized margins may differ due to market dislocations. In addition, energy prices are expected to remain elevated and turnaround costs to be higher.
“For full year 2022 we continue to expect reported upstream production to be broadly flat compared with 2021 despite the absence of production from our Russia incorporated joint ventures. On an underlying basis, we expect production from oil production and operations to be slightly higher and production from gas & low carbon energy to be broadly flat. bp continues to expect the other businesses & corporate underlying annual charge to be in a range of $1.2-1.4 billion for 2022. The charge may vary from quarter to quarter. bp continues to expect the depreciation, depletion and amortization to be at a similar level to 2021,” the report says.
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