BP's stock price declines by 3% following announcement of potential $2 billion loss and low refining profits.

• The stock price of BP fell following the company's announcement that it anticipates reporting an impairment of up to $2 billion in the upcoming second quarter.
• The ongoing review of BP's Gelsenkirchen refinery in Germany is the subject of charges included in the hit.
• BP expects upstream production in the second quarter to be "generally stable" compared to the previous quarter.

On Tuesday, the firm announced that it had dropped shares after flagging an expected impairment of up to $2 billion in the second quarter and warning of lower refining margins negatively impacting its results.

At 08:39 a.m. London time, BP shares were down 2.6% in early market trading.

The company announced on Tuesday that it expects weak refining margins and poor oil trading performance to negatively impact its second-quarter results, which will be released on 30 July. The estimated impact is between $500 million to $700 million.

The energy company anticipates recording post-tax asset impairments and contract provisions between $1 billion and $2 billion in the second quarter due to charges related to BP's ongoing review of its Gelsenkirchen refinery in Germany.

BP expects upstream production in the second quarter to be "broadly flat" compared to the previous quarter, with an anticipated average gas marketing and trading result.

Despite underperforming modestly, the energy sector has some positive aspects, such as stronger upstream volumes, according to RBC analyst Biraj Borkhataria.

After former CEO Bernard Looney resigned from his position at BP due to personal relationships with colleagues, the company appointed Murray Auchincloss as permanent CEO in January.

BP's profit decreased in the first quarter due to weaker margins in fuels and lower gas and oil prices, resulting in a need to save at least $2 billion in cash costs by the end of 2026.

This week, a competitor in the energy industry announced that it anticipates a post-tax impairment loss of up to $2 billion, primarily due to its operations in Singapore and Rotterdam. Additionally, the company stated that its second-quarter performance in the core gas division's trading and optimization is expected to fall short of the first quarter of 2024, owing to seasonal factors.