BP said Tuesday it will sell over $1.25 billion worth of oil it has in storage to take advantage of favorable futures market conditions.
The company purchased and stored over 23 million barrels of oil during the first three months of the year and will now gradually unwind that inventory, Reuters said.
“We expect the working capital inventory build to unwind over the rest of the year,” a company spokesman said.
BP managed to beat analysts expectations and book $2.6 billion in first quarter revenue despite a $545 million upstream loss.
CFO Brian Gilvary told Reuters that the company’s trading unit had a better than average quarter and compared the unit’s performance to its strong showing during the last oil price crash in 2009.
BP is hoping to take advantage of a futures market condition known as contango where the price of a commodity future climbs higher than the expected spot price.
According to the U.S. Energy Information Administration U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, jumped by 5.3 million barrels during the week ending on April 17.
U.S. crude inventories are currently at 489 million barrels, the highest inventory level seen during this time of the year in at least 80 years.