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Austrian energy group OMV posted a net loss for the first quarter due to high inventory costs. It has also lowered its production target and crude price forecasts in response to the fall in oil demand.
OMV said it lost €68 million ($74 million) in the three months to the end of March after making a profit of €496 million in the same period a year ago.
With economies around the world locked down and travel halted to contain the coronavirus pandemic, storage capacities are filling up globally, causing extra cost for energy companies.
Clean current cost of supplies (CCS) earnings before interest and tax (EBIT), which exclude special items and inventory gains or losses, fell 8 per cent in the quarter to €699 million. This is above an average estimate of €573 million in an OMV poll of 15 analysts.
Oil prices sank 65 per cent in the first three months of 2020 to lows of $22 a barrel as strict movement restrictions led to a collapse in demand for transportation fuels.
OMV said it expects the Brent oil price to average $40 per barrel this year and saw the realised gas price at €11.9 per megawatt hour.
The company now sees its 2020 output at around 440,000 barrels of oil equivalent per day instead of its previous target of 500,000.
Chief executive Rainer Seele has said he was considering reducing working hours for OMV staff and shutting down a refinery due to the fall in demand.
The group, which has a global workforce of around 20,000, announced last month it would cut spending by about 20 per cent this year. It said it had reached a deal to pay in stages for its stake purchase in plastics maker Borealis to free up cash.
To fund the $4.7 billion acquisition, OMV plans to sell $2.3 billion of assets by the end of next year.
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