Oil at $60 is the magic number for producers

For Europe’s biggest oil companies, $60 is the magic number. BP, one of the first companies to predict a prolonged price downturn, has “reset” its business to generate surplus cash flow, with oil at about $60 a barrel by 2017.

It joins Total, which last month unveiled investment cutbacks and project delays that will enable it to fund dividend payouts in the same circumstances, without the need to borrow.

A year after oil sank into a bear market, the industry is preparing for an extended downturn, with drillers slashing investments in exploration and production by a record 20% this year, according to the International Energy Agency.