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BP posted its second annual loss in a row as weak oil prices continue to dog the oil industry iStock

BP posted its second annual loss in a row, as weak oil prices continue to hit the oil industry. The oil giant said its full-year replacement cost loss narrowed to $999m last year as it faced "challenging" oil prices, from a loss of $5.2 billion the year before.

It said the average selling price of Brent Crude was $44 a barrel last year, the lowest it had been for 12 years.

Oil firms continue to struggle with the slide in crude prices, despite a rise in recent months after Opec nations decided to cut production.

BP's figures come after a mixed set of results across the sector. US giants Chevron and Exxon Mobil reported disappointing earnings, although Anglo Dutch company Royal Dutch Shell surprised with a cash surge, despite reporting weak profits.

But BP said its underlying replacement cost profit was $400m for the final three months of the year buoyed by a rise in oil prices and cost cutting, up from $196m in the same period year ago.

The oil major said it expected production to rise this year due to a string of new projects coming on stream.

BP said it will balance its books at an oil price of around $60 per barrel by the end of the year and said full-year capital expenditure was now expected at the higher end of its previous guidance at $16-17bn.

New projects

Over the last 12 month Brent Crude has lifted almost 60% to around $55 a barrel, although it is far below oil's all-time high of $147.27 in hit in July 2008.

BP chief executive Bob Dudley said last year the group "launched six major project start-ups - from Algeria to the Gulf of Mexico - and made final investment decisions on a further five major projects".

He added: "We have delivered solid results in tough conditions - and are well prepared for any volatility in oil pricing."

The business also said that it was nearing the end of mammoth fines from the 2010 Deepwater Horizon oil spill that killed eleven in the Gulf of Mexico. It took another charge of $799m for the disaster last year, bringing total charges to $62.6bn.

Dudley added: "With our Deepwater Horizon financial liabilities now substantially behind us, BP is fully focused on the future."