BP, a big company that works with oil and gas, is going to have a hard time because they made less money selling fuel. They think they might lose $3 billion because of this problem. They are also going to have to spend $2 billion to change the way they work at one of their places in Germany. Even though they are having a tough time, people think they will still make a lot of money ($3.13 billion) during the second part of this year. BP is not the only one facing challenges like this. Another big company, Shell, is also having some money problems. Read from source...

1. BP faces a $3 billion hit due to low demand and refining challenges.

2. The company anticipates a $3 billion hit due to reduced demand for fuels, which has affected its refining business.

3. BP has warned investors of significantly lower realized refining margins, which could slash its earnings by $500-$700 million for the quarter.

4. This decline is attributed to weak diesel prices and narrower North American heavy crude oil differentials, which have particularly impacted BP's large refinery in Whiting, IN.

5. Despite a high level of refinery maintenance in the quarter, the resumption of operations at the Whiting refinery is expected to provide an earnings uplift of $500 million.

6. Adding to its financial challenges, BP plans to take a $2 billion write-down as it scales back its refining operations at the Gelsenkirchen refinery in Germany.

7. The company aims to reduce operations by a third starting next year in response to weaker demand.

8. This strategic move underscores BP's efforts to streamline its operations amid a challenging market environment.

9. Despite these setbacks, investors expect BP's second-quarter underlying replacement cost profit, which the company defines as net income, to reach $3.13 billion, according to LSEG data.

10. Earlier this year, BP implemented a hiring freeze and paused renewable energy projects as part of CEO Murray Auchincloss' plan to enhance returns and cut costs by $2 billion.

11. BP's upstream production in the second quarter is projected to remain broadly flat compared with the prior three months, with oil and gas production standing at 2.38 million barrels of oil equivalent per day (Boe/ d) in the first quarter.

12. This stability follows the start-up of fields in Azerbaijan and the United States.

13. Additionally, higher realized oil prices in the second quarter are expected to boost profits by $100-$300 million.

14. BP is not alone in facing challenges. The British oil and gas multinational Shell plc SHEL is also expected to take an impairment charge of up to $2 billion in its upcoming results.

15. This follows Shell's decision to halt work on Europe's largest sustainable aviation fuel project in Rotterdam and sell off a refinery in Singapore.

16. Shell plans to shift its focus from low-carbon investments to expanding its gas business, with plans to develop a gas field east of Trinidad and Tobago.

17. As BP prepares to release its second-quarter results, the company is navigating a complex landscape of lower refining margins, strategic operational adjustments, and efforts to enhance profitability.

18. While the anticipated financial hit is significant, BP's measures to cut costs and adjust its operational focus highlight its strategic response to current market conditions.

Overall, the article's tone and language appear to be objective, informative, and accurate. However, some readers may find the information presented overwhelming, and they may struggle to understand

Bearish

Reason: The article discusses BP facing a substantial financial setback due to reduced demand for fuels, affecting its refining business. It warns investors of significantly lower realized refining margins, which could slash its earnings by $500-$700 million for the quarter. Despite operational adjustments and cost-cutting measures, the anticipated financial hit is significant, indicating a bearish sentiment.

1. BP: BP is expecting a $3 billion hit in 2Q24 due to refining challenges and low demand. However, it plans to cut costs by 2 billion and adjust its operational focus to streamline its operations. Despite these setbacks, BP's upstream production is stable with oil and gas production standing at 2.38 million barrels of oil equivalent per day in the first quarter. For investment, investors interested in the energy sector may look at better-ranked stocks like SM Energy Company (SM) and The Williams Companies, Inc. (WMB), each currently sporting a Zacks Rank #1 (Strong Buy).

Risks:
- BP's refining challenges and low demand may lead to a significant financial setback.
- BP's measures to cut costs and adjust its operational focus may not be successful.

Recommendation:
Investors can consider investing in SM Energy Company (SM) and The Williams Companies, Inc. (WMB) for exposure to the energy sector. Both stocks have a strong buy rating and show promising growth prospects. However, investors should be aware of the risks associated with BP and consider it only as part of a diversified portfolio.