Apr 29, 2018

BP sees no let up in pressure on global oil prices

Oil will be in plentiful supply and prices are likely to remain under pressure in the long term, according to the outgoing chairman of BP, who said there must be no let up in the company's efforts to lower costs. Mr Svanberg, who has been chairman for eight years, said there would be no return to the ill-disciplined spending that characterised the industry until oil prices crashed from more than $100 a barrel in 2014. "Therefore the team is extremely focused on making sure that, this time, if the oil price creeps up, not to let costs rise, but to stay alert." Most of the big oil and gas groups are echoing Mr Svanberg's rhetoric about the need to maintain spending discipline, given the prospect of growing US shale supplies and long-term curbs on oil demand from the rise of renewable energy and electric vehicles. Mr Svanberg saw little threat of a precipitous decline in oil demand, highlighting forecasts from the International Energy Agency that, even if the world delivered on the Paris climate agreement, there would still be a need for 95m barrels of oil a day in 2040.

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