From: Brian O'Connor, Daily Mail, London
Published October 23, 2004 12:00 AM

BP and Shell Enjoy High Oil Prices by Earning $100 Million Daily Profit

Oct. 23—BP and Shell are set to report stunning profits of $9 billion (5 billion pounds) between them for the three months to September — $100 million a day — as they cash in on the soaring oil price.

Last night this hit new peaks of $55.45 in New York and $51.32 for North Sea crude in London.

The market expects up to $4.7 billion net profits from Shell on Thursday, and up to $4.4 billion from BP on Tuesday.

Shell's refining profits have improved, while BP's Russian oil output is soaring. But Peter Hitchens at broker Cheuvreux says hefty taxes in Russia will hit BP's bottom line. A major driver of the oil price is the booming Chinese economy.

The latest figures show it slowing down slightly — but growth is still running at 9.1 percent.

Investment is racing ahead at nearly 30 percent, and it is importing vast quantities of oil, steel and other materials to fuel its march toward becoming a major industrial power. Output growth slowed from 9.6 percent in the second quarter to 9.1 percent in the third. The Beijing government moved to curb "overheating" earlier this year.

The official forecast for next year is 8 percent. But stripping out last year's SARS outbreak, Monument Securities economist Stephen Lewis doubts whether there has been any underlying slowdown at all.

China's amazing investment boom has slowed, but only from an annual rate of 31 percent to 28 percent. That offers some hope that its hunger for oil will ease.

© 2004, Daily Mail and the Financial Mail on Sunday, London. Distributed by Knight Ridder/Tribune Business News.

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