According to an old equity-market adage, January sets the tone for the year. After the worst January in years, the beginning of February was nothing to write home about, with stocks slipping again mid-week as oil headed back to 12-year lows. The renewed wobble in crude was accompanied by a 10% slide in BP's shares as it announced its full-year figures for 2015.
BP suffered its worst-ever annual loss of $5.2bn. The dividend yield jumped to over 8%. It announced 3,000 job cuts, on top of 4,000 already made, while CEO Robert Dudley predicted oil prices would recover this year: "It's lower for longer, not lower forever."
What the commentators said
Each $10 drop in the oil price costs around $2.1bn of operating cash flow a year. "It is hard to cut fast enough or deep enough to keep up." Despite the huge losses and higher debts, Dudley plans to keep the dividend at last year's level, said Jim Armitage in the Evening Standard.
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Perhaps he picked up the Russians' love of gambling while he was there running BP's joint venture with TNK. But his dividend plan is essentially a bet on the oil price recovering soon "the kind of wager even the most feckless count in Tolstoy would balk at".
Actually, he can probably keep up the payout for another year, even if oil stays where it is, reckoned Alistair Osborne in The Times. Capital expenditure is being slashed from $23bn in 2014 to $17bn this year. By the end of next year $7bn of costs will have gone. And while debt has gone up, it's still relatively low.
BP can afford to wait, agreed The Guardian's Nils Pratley. But there's a "deeper worry" than the dividend. Could all this retrenchment damage BP's ability to exploit the next upturn in oil prices?
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