Cost cuts, crippling legal settlements and persistent low Oil Prices – all taking their toll on BP.

Profits in the second quarter fell 45 percent, missing expectations.

BP blamed weak refining margins in part.

They were down to just $13.8 a barrel, from $19.4 a barrel a year ago.

(SOUNDBITE) (English) Cmc Markets ANALYST, Jasper Lawler, SAYING:

“With oil prices at 40 – 44 dollars at the moment, a year ago they were 60 dollars but as we move to the third and fourth quarters of this year that comparison is not going to be as good.”

Higher corporate charges relating to Gulf of Mexico oil spill were also a problem.

And a smaller return from its stake in Russian oil producer Rosneft.

At a time when oil prices are again looking vulnerable.

(SOUNDBITE) (English) CMC MARKETS, Market ANALYST, JASPER LAWLER, SAYING:

“We’ve had quite a big slide this month, down 10 percent, still within that sort of 45 – 50 range but really pushing into the bottom of it and I think the sense is here that we just couldn’t hold the gains above 50 dollars a barrel.”

Demand for U.S. crude has remained low, production high.

And Canada recently returning to the market after wildfires halted production, adding to the global glut of crude.

BP says it will continue to cut costs.

It’s shaved its investment budget again to below the $17 billion target previously set.

But on the plus side: it’s on its way to drawing a line under the deadly 2010 Deepwater Horizon liabilities which stand at $62 billion.

The majority of claims now settled.