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April 28, 2009    

BP quarterly profit hit by falling oil prices

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by Kay Murchie

Oil giant BP has announced a sharp fall in quarterly profits as oil prices fall and demand weakens.

Net profit for the first quarter was $2.4 billion (£1.64 billion), a fall of 62% compared with the same period in 2008.

However, today’s results have exceeded analysts expectations and shares in the company were up 1.1% to 489p in early trading.

Oil reached a high of $147 a barrel in July 2008 but dropped significantly to $40 towards the end of 2008 and is currently around the $50 a barrel mark.

BP said: “The overall weak environment for marketing and petrochemicals is expected to continue.”

However, the company also attributed the loss to lower earnings at its Russian joint venture TNK-BP.

Meanwhile, BP was hit by an increased pension charge, shelling out $368 million in retirement costs in the period, against $246 million a year ago.

The company is to increase its dividend by 4% to 14 cents a share for the period, in sterling terms, the company’s dividend is up 40% over the year to 9.584p.

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