Falling Oil Prices 'Will Cost Jobs'

The UK oil industry is facing a tough start to 2015 with job losses and pay cuts expected as prices continue to fall, experts have warned.

Brent crude dropped to a five-year low of under 57 US dollars a barrel briefly yesterday, and there are warnings today that prices could drop below 50 dollars in the new year.

Mike Tholen, economic director at Oil & Gas UK, said: We are already seeing, even at 60 dollars a barrel, that about 10% of our production could be at risk if we see low prices continue.

Inevitably there will be downward pressure on employment. I'm afraid people will lose their jobs at low prices - that is a tragedy and I will be working very closely with the Government to try and mitigate.

We would like to see more investment and we need to make the UK attractive at much lower oil prices than is currently the case.''

The Financial Times has predicted that the oil price will drop below 50 dollars in 2015, with US shale and Opec production expected to continue apace and slower growth in emerging economies such as China stifling demand.

BP, Royal Dutch Shell, Total and Chevron have all ordered pay cuts for skilled contractors, the FT has reported.