Oil firms struggle despite crude’s seven-year high gains

Crude oil was on course for its biggest quarterly gains since 2009 but firms are still struggling with the aftermath of the dramatic collapse in prices since 2014.

Brent crude, which regained the $50-a-barrel mark this week after plunging as low as $27 in January, is on track for a 27% rise over the past three months, although prices remain far below the highs of $114 a barrel seen two years ago.

Wood Group, the oil and gas engineer which cut around 5000 jobs last year because of the price slump, has been buoyed by contract wins but said the environment was “challenging” and is braced for a 20% fall in profits this year.

Elsewhere in the sector, Tullow Oil was struggling with problems of a different kind as it cut output targets from its Jubilee field off the coast of Ghana due to technical problems with its production vessel.

A further shutdown of the field will be needed next year.

Tullow’s $4.7 billion debt pile is also unsettling investors. Cantor Fitzgerald analyst Sam Wahab said: “We are uncomfortable with the company’s escalating net debt position against the backdrop of disappointing production guidance.”