Wednesday June 10, 06:41 PM
BP boss sees oil price between $60-90
LONDON (AFP) - The boss of British energy (LSE: BGY.L - news) giant BP forecast on Wednesday that world oil prices would trade between 60-90 dollars per barrel in the coming years.
"I think there's a rational argument, for where we are today, that an oil price somewhere between 60-90 dollars is the right sort of range," Chief Executive Tony Hayward said at a press conference unveiling BP's annual report.
Hayward argued that oil producing nations needed a price above 60 dollars to balance their books, while consumers appeared comfortable with prices beneath 90 dollars.
"In the OPEC world, most OPEC countries need prices north of 60 or 70 dollars per barrel to be able to invest in today's capacity, to invest in their social government programmes and to invest in tomorrow's capacity.
"If that price isn't realised, then the first thing that gets cut is tomorrow's capacity."
"If you got to the non-OPEC world, then marginal supply -- which is the Canadian tar sands and the ultra-deep water of Angola and Brazil -- all of that needs north of 60-70 dollars to be commercially viable because of the technology challenge and the cost of the development."
World oil prices had struck record peaks above 147 dollars per barrel in July 2008, but have since slumped on weak energy demand arising from the spreading economic downturn.
Hayward added: "If you look at the consumer side, there seemed to be very little change in consumer behaviour (last year) until the price went north of 100 dollars a barrel. Consumers seem comfortable to pay for oil up to 90 dollars."
The 12-nation Organization of Petroleum Exporting Countries cut its output target three times late last year to stabilise prices that tumbled from record highs in July to 32.40 dollars in December. The cartel pumps around 40 percent of world oil supplies.
Meanwhile, BP said Wednesday that global oil consumption fell 0.6 percent in 2008, the first annual decline since 1993 and the largest drop since 1982, as the economic downturn dented demand.
However, BP added in its annual Statistical Review of World Energy that worldwide oil production climbed by 0.4 percent last year.
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