"Superstorm" Sandy is set to inflict a negative hit on demand for crude oil as US East Coast refineries come to a standstill, but BP’s Chief Executive Bob Dudley has told CNBC that oil firms are set to bounce back quickly.
“I think it will bounce back very fast, the distribution system there is very efficient. I think we, and other companies, will get product in there,” he told CNBC Tuesday.
The supply of gasoline, diesel and jet fuel for the east coast of the U.S. almost ground to a halt on Monday as the bad weather forced the closures of two-thirds of the region's refineries, according to Reuters.
“We’ve had minor impacts. we don’t have refineries on the east coast. It’s sort of slowed down distribution of products along the north east of the country and we’re waiting for reports,” Dudley said.
“But I’m sure there is going to be a slowdown in refining and distribution for a while.”
On Tuesday, BP released its third-quarter earnings which showed unusually strong refining margins. Shares rose over 3 percent in morning trading in London on Tuesday.
“Well we’ve had a very good quarter, it’s been strong across the board but particularly in refining and marketing,” Dudley said.
Profit for the quarter rose to $5.2 billion from $3.7 billion in the second quarter which was well ahead of expectations. The firm also increased its dividend on Tuesday by 12.5 percent to 9 cents a share, which is its second dividend increase in less than a year.
The earnings announcement comes at a time when the firm is set to sell its Russian operations TNK-BP to fellow oil firm Rosneft and is preparing for a court battle with US authorities over its 2010 oil spill in the US Gulf.
“I think that these figures really took a few people by surprise, we weren't expecting them to be anywhere near as good,” Angus Campbell, head of sales at Capital Spreads told CNBC Tuesday.
“Of course if you buy into the whole selling of the TNK to Rosneft deal, if expectations for that to go through, then really on the back of these earnings that might give BP’s share price quite a boost going into the final quarter of the year and into 2013.”
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