One of the world's biggest energy firms cut its 30-year forecast for oil prices by 27% as coronavirus turns the industry on its head

• Oil major British Petroleum has downgraded its 30-year oil forecast by 27% on Monday.
• It now expects oil prices to average around $55 per barrel between 2021 and 2050. It's previous forecast was around $75 per barrel.
• CEO Bernard Looney said coronavirus will have a "enduring economic impact."
• BP also slashed the value of its business by almost $18 billion.

Oil major BP on Monday cut its 30-year forecast for oil by almost a third, the latest sign of how the coronavirus pandemic is changing the industry for good.

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BP now expects Brent prices to average around $55 a barrel between 2021 and 2050, 27% lower than its previous forecast. The previous forecast was around $75 per barrel, according to a Business Insider calculation.

BP also said it is using a lower price while calculating impairments.

"As a result of the revision of long-term price assumptions used for investment appraisal, BP has also revised the price assumptions it uses in value in-use impairment testing and these are now aligned to BP's revised investment appraisal price assumptions," BP said in a statement.

BP also expects to take a hit of up to $17.5 billion on the value of its assets as the company grapples with the shape of the energy industry post the pandemic.

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The company's chief executive Bernard Looney said: "In February we set out to become a net zero company by 2050 or sooner," adding that the COVID-19 pandemic looks increasingly likely to have an "enduring economic impact."

Looney added: "Since then we have been in action, developing our strategy to become a more diversified, resilient and lower carbon company. As part of that process, we have been reviewing our price assumptions over a longer horizon."

Oil price collapse

Oil prices plummeted in March when Saudi Arabia kicked off a price war with Russia.

The sector's troubles were then compounded by the coronavirus pandemic, which brought virtually every major economy to a standstill and paused virtually all travel. Prices for US oil even turned negative in mid-April.

But prices largely rallied in May on signs economies are inching closer to recovery and due to an extension of OPEC production cuts until July.

But prices still remain below their historical averages.

Brent, the global benchmark is trading around $38.17 a barrel, just over half its price as recently as January.

Brent prices were as high as $70 in January this year which highlights the extent to which the pandemic has altered the company's long-term price assumptions.