Oil prices 'low for up to 3 years' - BP boss

BP is planning for low oil prices for years to come

The boss of oil giant BP Bob Dudley has said that oil prices could remain low for up to three years.

He added that could send UK petrol prices below £1 per litre.

He told BBC Business editor Kamal Ahmed in Davos BP was planning for low oil prices for years to come.

That is expected to lead to job losses and falling investment in the North Sea oil industry and elsewhere, curbing supply and eventually forcing the price back up.

Italian oil group Eni has said the next spike could be around $200 a barrel.

Eni's chief executive, Claudio Descalzi, said the oil industry would cut capital spending by 10-13% this year because of slumping prices.

He said that would create longer-term shortages and sharp price rises in four to five years' time, if the Opec cartel fails to cut supplies.

Mr Descalzi was speaking at the World Economic Forum in the Swiss resort of Davos.

CEOs Eagerly Await Boost From Oil Price Drop at Davos

For Some Companies Lower Oil Prices Mean Savings and a Revenue Boost

In Davos - Low oil prices have roiled oil exploration and production companies, but chief executives from a wide swath of the global economy, gathered here for the annual World Economic Forum are looking forward to a boost from the drop.

Oil prices are down more than 50% since June, amid a supply glut partly due to booming American shale-oil production. In November, the Organization of the Petroleum Exporting Countries chose to maintain its output levels, saying it wouldn’t risk market share as non-OPEC producers, from the U.S. to Russia, continue to pump flat out.

Ghana to lose over $600 million over falling gold prices

The Minerals Commission is predicting that Ghana will lose 500,000 ounces of gold this 2014 as a result of declining gold prices, which has force some mining companies to suspend their operations.

Gold Production for 2014 is estimated at 3.1 million ounces, from an initial target of 3.6million, an Assistant Manager at the Minerals Commission, Daniel Krampah, has stated.

"We will definitely record lower volumes this year," he said, adding that, some companies have placed their mines under care and maintenance.

The price of an ounce of gold as at last Friday goes for $1,299.71, according to Bloomberg.

Fitch Says Ghana's Massive Rate Hike Alone Unlikely To Support Cedi

Rating agency Fitch said on February 7, that the massive interest rate hike and new foreign exchange controls by Ghana's central bank alone may prove inadequate to stop the currency, the cedi, from depreciating further.

On 6 February 2014, the Bank of Ghana raised the key policy rate by 200 basis points to 18 percent. The cedi weakened 14.6 percent against the U.S. dollar in 2013 and has depreciated 7.8 percent this year as on January 31.

In recent days, Ghana has also imposed forex controls including restrictions on foreign currency-denominated loans, repatriation of export proceeds, margin accounts for import bills, and revised operating procedures for foreign-exchange bureaus.

The interest rate hike and forex controls must be complimented by accelerated fiscal consolidation to address growing domestic macroeconomic imbalances, Fitch said. The agency blamed the African country's budget deficit, which has averaged 11 percent over the past two years, as the root cause of the imbalances.

World Economic Outlook Update| January 2014

Is the Tide Rising?

Global activity strengthened during the second half of 2013, as anticipated in the October 2013 World Economic Outlook (WEO). Activity is expected to improve further in 2014–15, largely on account of recovery in the advanced economies. Global growth is now projected to be slightly higher in 2014, at around 3.7 percent, rising to 3.9 percent in 2015, a broadly unchanged outlook from the October 2013 WEO. But downward revisions to growth forecasts in some economies highlight continued fragilities, and downside risks remain. In advanced economies, output gaps generally remain large and, given the risks, the monetary policy stance should stay accommodative while fiscal consolidation continues. In many emerging market and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern. Some economies may have room for monetary policy support. In many others, output is close to potential, suggesting that growth declines partly reflect structural factors or a cyclical cooling and that the main policy approach for raising growth must be to push ahead with structural reform. In some economies, there is a need to manage vulnerabilities associated with weakening credit quality and larger capital outflows.