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BP CEO said that with the mass rollout of the vaccine, his firm had a positive outlook for the coming year.
Renowned energy company BP Plc (NYSE: BP) has announced a loss of over $5 billion in 2020 showing that the oil industry is still suffering from the effect of the novel pandemic that grounded everything to a stop last year. The report has a negative impact on BP stock.
According to available information, the UK-based energy company was not left out of the victims of the year as the company suffered a loss of $5.7 billion.
BP Performance and Its Stock
While Refinitiv had predicted that the company was going to experience a loss of around $4.8 billion, the unusual low earnings due to the drop in demand for oil played a part in increasing the loss of the firm. The Q4 profit of the firm was also expected to be well above $250 million but instead, the firm only posted a profit of just $115 million.
This was not so in the fiscal year of 2019 when the company had recorded a net profit of $10 billion.
The company had cited other causes for its loss to be the low prices of gas and oil, the increased pressure on refining margins and exploration write-offs the company had to make. According to the oil firm, until a lasting solution is found to the coronavirus epidemic, its performance was going to remained affected.
The CEO of BP Bernard Looney labeled the year 2020 as the “toughest of his career” because of the “pain and sadness” many had experienced. He then went on to add that “the year’s result was hit hard by Covid.”
Looney also highlights the fact that the global economy probably underwent the worst recession since the ’40s. And with the oil industry witnessing a drop in demand for oil, it became imperative for the company to make certain adjustments to its planning price which led to write-offs and impairments.
BP stock is 3.92% down today in the pre-market after losing 0.067% yesterday. The pre-market price is around $21.
Oil Industry Looks to Bounce Back in 2021
Last year, the oil industry had one of its toughest years in recent memory as there was a record drop in the demand for oil, especially as more countries begin to explore sources for cleaner energy. Not only that, the sector also saw the value of its product fall drastically and write-offs which led to an unprecedented loss of jobs.
However, companies in the oil industry are looking to bounce back stronger this year and prove to investors that they are still a viable investment option. Their cause has been aided greatly with the prospects of the economy rebounding this year plus the advancements made in finding a vaccine for the virus.
BP CEO was quick to point out that with the mass rollout of the vaccine, his firm had a positive outlook for this year.