Shares in BP were down 2.4% to 465.1p after reporting full-year profits of $2.6 billion (£2.1 billion), their lowest level in at least a decade, as fourth quarter earnings of $400 million missed analyst expectations.
The group hiked its breakeven oil price to $60, above the current $55 level, due to an uptick in spending planned for next year.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said BP’s performance and the 7% yield on its shares showed the company was ‘still dependent on fair winds from the commodity markets to push it along’.
‘That premium yield reflects the limited scope for dividend growth in the immediate future, combined with the risk of pressure on the dividend if commodity markets fall backwards again,’ he said.
BP was left on the sidelines in a broad-based rally on the FTSE 100, which rose 38 points, or 0.5%, to 7,211, helped by the pound’s fall against the dollar.
Only a handful of stocks made losses as the pound fell 0.7% against the dollar to $1.238. A weak pound tends to boost the FTSE 100, whose constituents rely on overseas markets for around three-quarters of their earnings.
House builders were among the risers, rebounding from yesterday’s falls ahead of the government’s publication of its new housing strategy today.
Taylor Wimpey (TW) rose 3.3% to 175.4p, Persimmon (PSN) was up 2.8% at £19.93 and Barratt Developments (BDEV) added 2.8% to 507p.
But the biggest riser on the index was DCC (DCC), up 5.7% at £67.40 after the oil services group announced a $237 million deal to buy ExxonMobil’s (XOM.N) Norwegian petrol station network.