BP p.l.c. (NYSE: BP) stock traded higher Tuesday after the company reported a sharp increase in its third-quarter refining indicator margin.

BP's refining indicator margin rose to $46.70 per barrel from $29.60 in the previous quarter, as the Middle East conflict pushed oil prices and refining margins higher.

Upstream Production Outlook Remains Mixed

BP expects third-quarter 2026 upstream production of 2.19 million to 2.24 million barrels of oil equivalent per day, compared with 2.201 million in the second quarter.

Gas and low-carbon energy production is expected to reach 775,000 to 795,000 barrels of oil equivalent per day, up from 765,000 in the previous quarter.

Meanwhile, oil production and operations output is forecast at 1.415 million to 1.445 million barrels of oil equivalent per day, compared with 1.436 million previously.

Gas Trading Set to Strengthen as Oil Realizations Weaken

BP expects gas and low-carbon energy realizations to improve by $100 million to $300 million from the second quarter, partly reflecting changes in natural gas benchmarks outside Henry Hub.

The company also expects significantly stronger gas marketing and trading results.

However, oil production and operations realizations are projected to decline by $200 million to $400 million sequentially.

Exploration write-offs are expected to fall significantly, as the second quarter included the impact of the Bay du Nord sale.

Refining Gains Offset Weaker Customer Business

BP expects significantly weaker results from its customers business due to lower fuel margins, higher Castrol base oil prices and reduced midstream contributions. Seasonal volume gains should partly offset those pressures.

BP expects stronger realized refining margins to provide a $1.9 billion to $2.1 billion boost to its products business results compared with the second quarter.

Refinery throughput is forecast at 1.375 million to 1.405 million barrels per day, down from 1.467 million.

The decline reflects the July 31 completion of the Gelsenkirchen divestment and changes in planned maintenance and turnaround activity.

Net Debt Falls, But Impairment Charges Loom

BP expects net debt to decline to $13.5 billion to $14.5 billion from $22.3 billion in the second quarter.

However, the company anticipates $3 billion to $4.5 billion in after-tax impairment-related adjusting items, primarily tied to transition businesses within its gas and low-carbon energy segment.

RBC analysts told Reuters BP's transition-related impairments over the past year have reached approximately $10 billion, equivalent to about 10% of its pre-pandemic equity.

The analysts questioned whether the latest charges would finally clear the remaining financial impact of BP's previous renewable energy investments.

BP Earnings Outlook And Analyst Ratings

BP is scheduled to report earnings Oct. 30, 2026.

Analysts expect earnings of 36 cents per share, down from 85 cents a year earlier. Revenue is projected to rise to $64.5 billion from $48.42 billion.

The stock trades at a price-to-earnings ratio of 22.3.

BP has a consensus Buy rating and an average analyst price forecast of $52.16, based on 15 analysts. Forecasts range from $46 to $58. Recent analyst actions include:

• TD Cowen: Maintained Hold and raised its price forecast to $47 on Sept. 28.
• Mizuho: Maintained Outperform and raised its price forecast to $56 on Oct. 5.
• Wells Fargo: Upgraded BP to Overweight and raised its price forecast to $57 on Oct. 1.

BP Price Action: BP shares were up 3.92% at $48.56 at the time of publication on Tuesday. The stock is trading at a new 52-week high, according to market data.