Experts anticipate price of oil could reach US$100 per barrel in six years

Huda Bakri
For Al-Shorfa.com
2009-01-17

Algeria's Energy and Mining Minister and OPEC President Chakib Khelil. Khelil expects oil prices to stabilise in the first two months of 2009. (Reuters)

Chief economist at the International Energy Agency Fatih Birol, at an energy conference in Istanbul on December 29 said he expects an increase in oil prices, forecasting that oil will reach nearly US$100 per barrel between 2010 and 2015. He predicted oil prices would continue to be vulnerable to downward pressure this year, but expects prices to improve again in 2010 as the global economy recovers.

Oil prices declined almost 60 percent in 2008, the largest annual drop since the start of oil futures trading 25 years ago. They increased nearly seven percent in the last three days of 2008, however, reaching more than US$37 per barrel. The increase came after the UAE followed Saudi Arabia's lead in further reducing the supply of crude oil, implementing the largest reduction in production ever undertaken by OPEC, a move that was decided on in mid-December.

OPEC has cut production three times, withdrawing nearly five percent of the global supply in an attempt to stop the decline in crude oil prices. OPEC President Chakib Khelil said after the production cut he expects oil prices to stabilise during the first two months of 2009.

Birol said oil field development projects have been postponed and warned that will create a serious problem because oil supplies will be limited even further this year. He also predicted a shift away from an energy market controlled by multinational companies toward a market governed by national companies, and that national companies will account for 80 percent of oil and natural gas production by 2030.

Birol's statement came on the same day Omani Minister of Commerce and Industry Maqbool bin Ali bin Sultan, speaking at a regional summit of Gulf Cooperation Council leaders in Oman on December 30 confirmed that the Arab Gulf states are uncomfortable with the drop in oil prices which threatens oil producing countries with budget deficits. To avoid that, he said Gulf States would feel comfortable with oil priced at about USS$60 a barrel.

[Reuters news agency,

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