BP shares crashed to a two-and-a-half-year low as it warned it will rack up costs of at least $1bn (£637m) over the next year in the wake of the plunging oil price.
Up to 1,000 jobs could go, amid signs from the Organization of the Petroleum Exporting Countries (Opec) that prices could stay low throughout 2015.
Opec said in a report that it expected global demand to fall to the lowest level in more than a decade. An Iranian official in the oil cartel added that crude prices could plunge as low as $40 a barrel in the near future if divisions among the producers widened.
Opec decided against production cuts two weeks ago to maintain market share for the cartel, which accounts for about 40 per cent of global oil output. Brent held its ground above $66 a barrel yesterday.
BP admitted that it is having to accelerate plans to strip out costs in response to a dramatic plunge in crude prices since June.
BP shares yesterday dropped below 400p, a level last seen in May 2012, before closing down 5.64p at 400.31p.
Oil prices are likely to remain under pressure amid infighting within Opec. Saudi Arabia and Iraq have widened discounts for Asian customers, while smaller members, such as Ecuador, desperately need higher prices and oil revenues.
Rail and bus operator Stagecoach, meanwhile, warned of “challenges” ahead as cheaper fuel costs tempt passengers off buses and into their cars. Its shares fell 22.1p or 5 per cent to 385.3p, as it warned of lower earnings from its regional UK bus operations and US business this year, although its rail business should help make up the shortfall.
It has lowered expectations for operating profits.