BP says oil prices will be low for a while

A BP logo is seen at a petrol station in London January 15, 2015. REUTERS/Luke MacGregor/FilesThomson ReutersA BP logo is seen at a petrol station in London

BP reported a second-quarter profit of $US1.3 billion on Tuesday, missing analysts’ expectations, after taking a $US9.8 billion pretax charge related to a settlement with U.S. authorities over the 2010 Gulf of Mexico spill.

BP maintained its dividend at 10 cents per ordinary share.

BP’s underlying replacement cost profit, the company’s definition of net income, was $US1.3 billion, lower than analysts expectations of $US1.64 billion.

This month, BP reached an $US18.7 billion settlement with the U.S. government and five states to resolve most claims from the deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history.

In the earnings statement, CEO Bob Dudley noted the recent slide in oil prices with an outlook that doesn’t show an expectation for higher prices soon.

Dudley said (emphasis added): “The external environment remains challenging, but BP moved quickly in response and we continue to do so.

“In the past few weeks oil prices have fallen back in response to continued oversupply and market weakness and the recent agreements regarding Iran. I am confident that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future.”

On Monday, Brent crude, the international benchmark, fell into a bear market, joining West Texas Intermediate crude, the US benchmark.

(Reuters editing by Jason Neely)

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