Lord Browne, BP’s chief executive, went against the grain of recent energy hikes and said that within a few years crude oil prices would be $40 a barrel or even lower. “It is very likely that, in the medium term, prices will stand at about $40 on average. In the very long run, even $25 to $30 are possible,” he said in an interview with Der Spiegel.
Although, Browne argued that there was little likelihood of prices dropping back in the short term, new potential in West Africa and with Canada’s heavily polluting tar sands, would bring prices down.

Traders seem to disagree that the oil price will fall. Paul Horsnell, the head of energy research at Barclays Capital, said that trading on the futures markets did not agree with Lord Browne’s view. “The market is not projecting anything below $60 right through the curve. At this moment, it is impossible to buy oil for less than $66,” he said.

So it seems that Browne is trying to bring the price of oil down by purely talking it down. But events in the Midddle East weigh more on the markets than his words.

One Comment

  • Apparently BP has never heard of Peak Oil theory. While I’m not convinced of the doomsday scenario that Peak Oilers promote, there has to be a maximum production rate, and inevitable decline in production if oil is a finite fossil fuel. Of course, the Russians say it is not a finite fuel at all, but a renewable abiotic substance. Perhaps BP has read the Russian research but at the same time is perpetrating the myth of finite supplies in order to (a) lower the price to eliminate substitutes and (b) not lower it too much, to protect billions in profits. OPEC idealizes a $30-40 price, and now so does BP. What AREN’T they telling us??

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