BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 percent this year, putting pressure on Opec producers and Russia to curb supplies to keep prices in check. Brian Gilvary, the UK oil major’s chief financial officer, said 300,000-500 ,000 barrels a day were at risk this year – a big chunk of 1.2m b/d growth initially expected by the company and global energy agencies. Mr Gilvary added that BP was closely watching “whether Opec balances or not” by enacting production cuts with allies including Russia to bring Brent crude prices “back to the $65 a barrel range”.
His remarks come as Opec and Russia discuss emergency cuts in oil production after the crude price entered a bear market by falling more than 20 per cent in recent weeks to below $55 a barrel. The falling price presents an additional challenge for BP just as Bernard Looney, its head of exploration and production, takes over as chief executive on Wednesday from Bob Dudley, who leaves the company after nearly 10 years at the helm.
BP’s earnings – like its rivals in the US and Europe – have been under pressure as increased production failed to offset lower energy prices, leading to a 26 per cent drop in fourth-quarter profits. In the three months to December 31, underlying replacement cost profits – BP’s definition of net income and the measure tracked most closely by analysts were $2.6bn, versus $3.5bn in the same period in 2018.