The oil giant BP posted a 4% fall in first quarter profits today due to the effects of storm damage to rigs and the shutdown of its biggest refinery.
Profits came to $5.27bn (£2.95bn) between January and March compared with $5.49bn a year ago as the setbacks in North America meant BP was unable to benefit fully from high oil prices.
Hurricanes knocked out its Thunder Horse rig in the Gulf of Mexico and production has yet to be restarted there, contributing to group output falling below last year's level at a time when crude oil prices averaged $61.79 a barrel - 5% higher than in the final quarter of 2005. The chief executive, Lord Browne, believed oil prices would remain strong due to disruption of supplies from Nigeria and concerns over a political stand-off with Iran.
The company's daily output during the quarter was 4.035 million barrels of oil compared with 4.101 million during the corresponding period a year earlier.
As for its refining business, BP said its Texas City refinery in the US was operating again at a limited level after hurricanes and a fatal fire had forced its closure last year.
Lord Browne said oil prices at the end of the quarter were more than $14 a barrel higher than the same period in 2005, with large stockpiles of crude and increased output by Opec failing to stem the increases.
Demand was unlikely to recede, as the US economy appeared to have rebounded in the first quarter, Europe was also recovering and the Asian and Latin American economies continued to grow, he said.
But the high oil prices were causing a headache at the pumps - both for motorists and BP.
Lord Browne said an initial improvement in retail margins had reversed as the quarter went on, to show an overall decline compared with a year earlier.
"A further rise in wholesale gasoline and crude prices is evident in April and marketing margins are expected to remain volatile," he said.