The third-quarter looks like a messy one for large integrated oil companies since crude prices had climbed to an average $115 a barrel a year ago and gasoline prices supported favorable refining margins. That makes for some tough comparables to 2009's third quarter but investors hope BP's better-than-expected earnings on Tuesday will be repeated throughout the week as refiners' release quarterly results that show they've kept an eye on costs throughout the weak demand period.
Higher production and effective cost management contributed to BP's third-quarter earnings of $5.3 billion, which surpassed analysts' estimates by nearly $1.5 billion, but fell 34% from the prior year
Although oil prices have recovered since the downturn--settling at just under $80 a barrel on Tuesday--gasoline prices lack the same strength and sluggish demand has crude oil inventories brimming with excess supply. As in the prior quarter, refining margins remain a major pressure on integrateds but restructuring and other turnaround efforts are expected to show some improvement from the prior quarter.
Article Source: http://www.forbes.com/2009/10/27/refiners-oil-earnings-markets-equities-commodities.html
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