BP logos are seen at a BP petrol and diesel filling station southeast of London on June 15, 2020.
BEN STANSALL | AFP | Getty Images

LONDON — British energy major BP on Tuesday reported stronger-than-anticipated earnings for the first quarter, following a period of stronger commodity prices and a brighter demand outlook.

It comes as oil and gas majors seek to prove to investors that they have gained a more stable footing amid the ongoing coronavirus crisis.

BP’s first-quarter underlying replacement cost profit, used as a proxy for net profit, came in at $2.6 billion. That compared with a profit of $115 million in the fourth quarter and $791 million for the first quarter of 2020.

Analysts at Refinitiv had expected BP to report first-quarter profit of $1.4 billion.

Shares of BP are up more than 16% year-to-date.

The oil and gas industry was sent into a tailspin last year as the Covid-19 pandemic coincided with a historic demand shock, plunging commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job cuts.

BP reported its first full-year net loss in a decade in 2020 as the global health crisis took a heavy toll on its business operations, with CEO Bernard Looney describing the 12-month period as the “toughest” of his career.

‘Lingering concerns’

The energy company had previously warned of a tough start to 2021, with widespread travel restrictions still in place, but Looney suggested the rollout of Covid vaccines should help to improve investor sentiment.

Oil prices have climbed around 25% since the start of the year, supported by the rollout of Covid vaccines and an improving economic outlook.

More recently, soaring Covid infections in India and an expected supply increase from producer group OPEC+ have added downward pressure to oil prices.

International benchmark Brent crude futures traded at $66.24 a barrel on Tuesday morning, up around 0.9% for the session, while U.S. West Texas Intermediate futures stood at $62.47, more than 0.9% higher.

Earlier this month, the International Energy Agency upgraded its oil demand forecast for 2021, saying market fundamentals appeared “decidedly stronger” when compared with April last year.

The Paris-based energy agency tempered its optimism for the year ahead, however, warning that “lingering concerns” persist over the strength of the demand recovery.