LONDON (Reuters) - BP is working on an assumption oil prices will average $50 to $55 a barrel next year as global inventories gradually return to normal levels, Chief Financial Officer Brian Gilvary said on Tuesday.
An agreement reached between OPEC and other major oil producing nations to limit output in order to reduce a glut is having an impact, Gilvary said, but he did not expect oil prices to remain at their current levels above $60 a barrel.
“By the end of next year we will be back at a more normal stock level. It will continue to be bumpy into next year and I wouldn’t be assuming those levels of prices for next year,” Gilvary told Reuters in an interview after BP report a doubling of profits in the third quarter.
“I think $50-$55 is a pretty good working assumption for next year,” he said.
BP’s operations will be able to generate profit next year at $50 a barrel and perhaps $45 a barrel, he added. In the longer term the company is working to reduce its breakeven level to $35 a barrel, he said.
Reporting by Ron Bousso; editing by Jason Neely