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Rising prices boost Shell and BP Rising prices boost Shell and BP
(20 minutes later)
Oil firms Royal Dutch Shell and BP have made better-than-expected first-quarter profits thanks to the rising price of oil, which is close to $120 a barrel.Oil firms Royal Dutch Shell and BP have made better-than-expected first-quarter profits thanks to the rising price of oil, which is close to $120 a barrel.
Shell made profits of $7.8bn (£3.9bn) in the first three months of the year, up from $6.9bn a year ago.Shell made profits of $7.8bn (£3.9bn) in the first three months of the year, up from $6.9bn a year ago.
And rival BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn.And rival BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn.
In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.
In morning trade in London, shares in both Shell and BP were up by more than 4.5%.In morning trade in London, shares in both Shell and BP were up by more than 4.5%.
Oil price movesOil price moves
The quarterly results come as a strike by oil workers at the Grangemouth refinery in Scotland came to an end.The quarterly results come as a strike by oil workers at the Grangemouth refinery in Scotland came to an end.
The stoppage had disrupted fuel supplies and halted much of the UK's North Sea oil production.The stoppage had disrupted fuel supplies and halted much of the UK's North Sea oil production.
Some petrol stations in Scotland and northern England had introduced rationing or raised prices.Some petrol stations in Scotland and northern England had introduced rationing or raised prices.
Oil prices have been rising steadily since January, when it broke through the $100 a barrel mark. The price of oil prices has been rising steadily since January, when it broke through the $100-a-barrel mark.
This week the cartel of oil producing nations, Opec, warned that prices could reach $200 a barrel.This week the cartel of oil producing nations, Opec, warned that prices could reach $200 a barrel.
On Monday prices were lifted to a record $119.93 a barrel by the Grangemouth strike and supply problems in Nigeria due to pipeline attacks. On Monday, US light, sweet crude hit a fresh record of $119.93 a barrel. Prices rose as traders eyed the disruption caused by the Grangemouth strike and supply problems in Nigeria following pipeline attacks.
However the price fell to $117.64 a barrel in Asian trade on Tuesday. However, the oil price slipped to $117.64 a barrel in Asian trade on Tuesday.
Difficult yearDifficult year
Shell chief executive Jeroen van der Veer said he would continue to grow the firm after a "good operating performance".Shell chief executive Jeroen van der Veer said he would continue to grow the firm after a "good operating performance".
Shell shares are listed in the UK and the Netherlands, while the company's headquarters are in The Hague.Shell shares are listed in the UK and the Netherlands, while the company's headquarters are in The Hague.
Royal Dutch Shell A sharesRoyal Dutch Shell B sharesBP sharesRoyal Dutch Shell A sharesRoyal Dutch Shell B sharesBP shares
BP's strong figures come after 12 months of turmoil for the firm, which announced a fall in 2007's annual profits in February. At the time it also announced that it was to cut 5,000 jobs.BP's strong figures come after 12 months of turmoil for the firm, which announced a fall in 2007's annual profits in February. At the time it also announced that it was to cut 5,000 jobs.
Other low points have included receiving a $50m fine for the 2005 Texas City refinery explosion in which 15 people died.Other low points have included receiving a $50m fine for the 2005 Texas City refinery explosion in which 15 people died.
This was part of a larger $373m fine by the US Department of Justice for committing environmental crimes and fraud, and included a fine for price manipulation.This was part of a larger $373m fine by the US Department of Justice for committing environmental crimes and fraud, and included a fine for price manipulation.
And in May last year, the company's boss, Lord Browne, resigned after lying to a court in an attempt to block stories about his private life.And in May last year, the company's boss, Lord Browne, resigned after lying to a court in an attempt to block stories about his private life.
'Oil scarcity''Oil scarcity'
Simon Wardell, oil analyst at Global Insight, said the rising price of petrol was "predominantly down to high oil prices".Simon Wardell, oil analyst at Global Insight, said the rising price of petrol was "predominantly down to high oil prices".
"Oil prices are high because of the weak dollar and because reserves are under pressure, the spare capacity margin is narrowing, Opec does not have a great deal more oil to pump," he said."Oil prices are high because of the weak dollar and because reserves are under pressure, the spare capacity margin is narrowing, Opec does not have a great deal more oil to pump," he said.
"That scarcity is reflected in the high oil prices.""That scarcity is reflected in the high oil prices."
But he said that oil firms could not sit back and just watch the profits flow in.But he said that oil firms could not sit back and just watch the profits flow in.
"Oil firms have to think about the long-term investment, and what prices might be in the future.""Oil firms have to think about the long-term investment, and what prices might be in the future."