BP reported a 96 per cent drop in fourth-quarter income because the hit to power demand from the pandemic and weaker buying and selling outcomes took the UK oil main to its first annual loss in a decade.

Underlying revenue on a substitute value foundation — the measure of earnings tracked most carefully by trade analysts — was $115m within the three months to December 31.

This fell wanting analyst expectations of a revenue of $370m, based on a company-compiled estimate, and compares with $2.6bn in the identical interval the yr earlier than.

It has been a brutal yr for the trade, with lockdowns and journey bans inflicting massive drops in earnings.

For the total yr, BP slumped to a lack of $5.7bn, from a $10bn revenue in 2019, due to the collapse in power costs, a writedown within the worth of oil and gasoline property by billions of {dollars} and depressed demand.

The group stated quarterly efficiency was “considerably” hit by decrease gas gross sales and refining margins. It additionally blamed weaker gasoline advertising and marketing and buying and selling outcomes, and better exploration write-offs.

“The climate was colder in Asia than we had thought and hotter in America than we had thought,” Bernard Looney, chief govt, stated in an interview. “Our merchants had been caught.” 

BP, which returned to profit in the third quarter, had already warned of a risky outlook.

Oil demand is anticipated to rebound in 2021 and it expects to learn from larger gasoline costs in future. However fuels gross sales and refinery margins are forecast to stay underneath strain.

The value of crude oil has recovered from final April’s lows — under $20 a barrel — helped by a nascent market restoration and the rollout of vaccinations. Though Brent crude is once more above $55 a barrel, it’s removed from the $70 stage of a yr in the past.

“I feel there are points about mutations and points about vaccine rollout . . . however, on the similar time, we have now vaccines so there will likely be a restoration,” stated Mr Looney. “How lengthy it can take, time will inform.”

The current oil rebound has helped BP’s share worth, which final yr fell to multi-decade lows. However the shares fell greater than 3 per cent after the outcomes had been revealed on Tuesday.

The pandemic is accelerating a change of the group underneath Mr Looney, who began in his function in February 2020 and promised to show BP right into a web zero emissions firm by 2050.

BP is shrinking manufacturing within the coming decade, promoting property and reshaping its enterprise for a decrease carbon future, which incorporates restructuring the corporate and chopping 10,000 jobs.

It cut its dividend in August for the primary time for the reason that Deepwater Horizon catastrophe in 2010 to five.25 cents, which it has since maintained together with within the newest quarter.

It has additionally slashed capital spending by billions of {dollars}, lower prices dramatically, secured new credit score strains, issued bonds and stalled exploration exercise. It expects capital expenditure to be $13bn in 2021.

It additionally needs to promote $25bn in property by 2025 to chop debt and pay for inexperienced power funding.

The corporate stated web debt — which stood at $39bn within the fourth quarter — would enhance within the first half of 2021, however it nonetheless aimed to achieve its $35bn goal as early as the top of this yr.

BP introduced this week the sale of a 20 per cent stake in an Omani gasoline block for $2.6bn.