BP sees US and China leading oil demand recovery, Q1 profits treble

London (Quantum Commodity Intelligence) – Oil major BP said Tuesday global stocks are expected to decline and reach historical levels in terms of days of forward cover as oil demand is set to recover due to strong growth in China and the US.

Reporting financial results that showed a Q1 profit of $2.6 billion, the UK-based energy producer said it would buy back $500 million worth of shares in Q2 as an offset against dilution from employee share options.

The company's profits were up more than threefold year-on-year, primarily as a result of higher oil and gas prices, plus higher profits from natural gas trading.

"The oil market is set to continue its rebalancing process. Global stocks are expected to decline and reach historical levels (in terms of days of forward cover) at the end of 2021," it said.

"We expect global gas demand to recover to above 2019 levels, and LNG demand to increase as a result of higher Asian imports. Industry refining margins are expected to improve over the course of 2021 compared to the first quarter. However, refining margins are expected to remain weaker than pre-COVID-19 levels.'

The company said solid earnings and income from asset sales helped it to lower its net debt to about $33 billion from $39 billion in the previous quarter. BP shares rose over 2% in early trading in London before easing back.

Meanwhile, US peers Exxon Mobil Corp. and Chevron Corp. are scheduled to file Q1 results on Friday

Quantum assessed cash Brent at $66.25/barrel on the Singapore close Tuesday, around $0.50/b higher on the day.