BP told the markets its first quarter pro forma profit fell by 57% to $US1.58 billion (£1.1 billion) compared with $US3.71 billion for the same period last year.

BP pinned the blame for the result largely on "severely depressed" margins in the refining and marketing division, which includes forecourt operations. "Both refining and marketing felt the effects of the poorest trading environment seen for a decade," said chief executive, Lord Browne.

As for BP's exploration and production arm, its profits also fell by more than half to $US2.4 billion as revenues from crude sales fell by an average of $US6 per barrel due to lower oil and natural gas prices, the company said.

Lord Browne said revenues from oil sales have shown some recovery thanks to the effect on price of OPEC output cuts, rising Middle East tensions and the recovering US economy. Lord Brown added that US natural gas prices have also risen due to an increase in demand but he warned that the outlook for refinery and forecourt operations remained "challenging".

Despite the poor result, BP shares rose 18.5p to 587p after the company said it was sticking to its full-year profit forecasts, which reassured investors.