BP’s replacement-cost profit – a measure that strips out the effect of changes in the value of inventories – fell 50% year on year in the third quarter, to $4.98bn, the UK oil major said.

The better-than-expected result benefited from a lower effective tax rate and cost cutting. BP raised its target for cost savings over the whole year to $4bn from $3bn.

Total production rose 7% to 3.92m barrels of oil equivalent a day in the period, from 3.66m in the same quarter of 2008.