BP, EUROPE’S second-biggest listed oil company by market value, yesterday reported record profits of $25.6 billion (€19.6 billion) for 2008 but warned of “a much more challenging environment” because of the fall in oil and gas prices.
Its results, which showed a 24 per cent drop in net income to $2.6 billion for the fourth quarter, illustrated the difficulties that falling crude prices have caused large international oil groups.
While the price of oil for immediate delivery has remained close to $40 per barrel over the past two months, longer-dated futures prices have been drifting steadily lower. The futures market implies a steep recovery in prices to about $55 per barrel in a year’s time.
However, executives and analysts are planning for the prospect of oil staying at today’s levels for longer.
That could put pressure on all companies and trigger a fresh round of mergers.
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