BP CEO Bob Dudley has said the group expects oil markets to re-balance towards the end of 2016.

Today BP Plc (LON:BP) released its first quarter results to investors and analysts in which it posted an underlying replacement cost profit for the quarter of $532 million, improving from $196 in the prior quarter although down from $2.6 billion during the first quarter of 2015 as low oil prices continued to pressure the business.

The company said that lower costs across the group allowed it to offset the impact of significantly weak oil and gas prices.

The Brent oil market price dropped from $44 in the fourth quarter to an average of $34 which meant refining margins at BP were at their lowest quarterly margins for more than five years. In the current quarter the group noted that Brent prices have improved to $40 up to the current point.

Bob Dudley, Chief Executive of BP group said:

“Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP’s cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track.”

Dudley added that market fundamentals have implied that robust demand for oil and gas alongside weak growth in supply will help to rebalance global oil prices towards the end of 2016.

In April BP received its final judgement for the Deep Water Horizon incident which BP said was an important milestone for the business to move forward. A one off charge of $0.9 billion was paid in relation to the spill during Q1 bringing the pre-tax cumulative amount to $56.4 billion.

BP left its dividend unchanged during the quarter paying 10c per ordinary share to shareholders which will be paid in June.