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.