BP can afford to wait a while yet before cutting its dividend, but the real problem seems to be its other cuts
“Oil prices continue to be challenging in the near term,” says BP. You bet. The oil major fell to a record loss of $6.5bn (£4.5bn) last year, and that period included a final quarter in which the oil price averaged $44 (£30.50) a barrel. Brent now stands at $33 (£22.90) a barrel. How much pain can BP take before cutting its dividend?
There’s no need to panic, says chief executive Bob Dudley, once again pledging a commitment to a dividend that currently offers a yield of 8% on a share price down 9% on Tuesday. Top marks for loyalty to those investors holding BP stock for income – which include many of our pension funds – but is this just a refusal to face financial facts?