BP Q1 profits fall as oil spill still weighs

Oil producer BP reported a bigger-than-expected drop in profits on Tuesday, despite an increase in crude prices, as production fell after it was forced to sell fields to pay for the oil spill.

London-based BP said replacement cost (RC) net profit was $4.93 billion in the quarter, compared to $5.61 billion in the same period last year.

Stripping out one-off items such as the profit on asset sales, the result was $4.80 billion, below an average forecast of $5.10 billion from a Reuters poll of nine analysts.

Brent crude prices averaged $118.60 per barrel last quarter, up from $105.43 in the same period a year before.

RC earnings strip out unrealised gains or losses related to changes in the value of inventories, and as such are comparable with net income under US accounting rules.