Benchmark Brent crude price slides below $52-barrel as Scottish Labour leader attends Aberdeen oil-industry crisis meeting

Jim Murphy, MP
Jim Murphy, MP

6 January 2015 1.00pm

Benchmark oil prices for North Sea Brent crude fell below $52-barrel in early trading today in London as Scottish Labour leader Jim Murphy visited Aberdeen to attend the council’s oil-jobs crisis summit.

Oil prices sank to their lowest on the UK stock exchange for five and a half years, sliding down 3% from the previous session amid a global oil glut as Middle East, Iraqi and Russian oil producers keep pumping at record high levels.

As a result, global oil exploration investment and capital expenditure is being slashed and – as we reported earlier today – the head of Britain’s oil and gas industry trade body has admitted that ‘oil and gas exploration in the North Sea has virtually dried up’ amid a continuing oil glut, which has seen the benchmark Brent Crude oil price almost halve in the past six months.

Malcolm Webb, outgoing chief executive of Oil and Gas UK, the London-based trade association, also confirmed that North Sea faces a difficult 2015.

Globally, industry analysts forecast that almost $1 billion of new oil exploration will be axed this year as crude prices languish at around the $55-barrel level.

Jim Murphy said: “I meet in Aberdeen today with oil workers, their trade unions and some of the North Sea’s largest employers.

“The industry is going through what oil workers have described as a crisis period. At the time of writing, the oil price has fallen below $54. That’s less than half the price predicted by the SNP in their White Paper, which formed the economic basis for their independence case.

“But more immediate than the politics is the fact the plummeting oil price has resulted in a number of firms cutting the wages of their staff. The jobs and livelihoods of thousands are at risk. That’s why it’s so important that the Scottish and UK Governments do everything within their power to secure the jobs of thousands of oil workers.

“I want the Scottish Government to create a resilience fund to be used in times of crisis for some of Scotland’s crucial industries and to deal with the consequences of large scale redundancies on local economies. I also want the Edinburgh Government to use its power over business rates to support industries experiencing unforeseen and exceptional change, a change that of course would be subject to EU state aid rules.

“That means consulting on how it would be possible to cut the business rates employers have to pay during this time of great uncertainty or looking at support for small businesses as a result of large scale redundancies. The small firms that depend so heavily on work from the North Sea need support.”

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