Oil price set to remain high

15 July 2009

16 July 2009

Oil prices are expected to stay in the region of $70 (£42) to $100 (£61) a barrel over the next decade.

This is the prediction made by the Organisation of the Petroleum Exporting Countries (Opec) in its annual report, World Oil Outlook, published this month.

It said prices are likely to be pushed to these levels by the increasingly "harsh conditions" in developing and producing oil supplies. Opec added oil prices had "roller-coasted" in the past year, peaking at a record $141 (£86) a barrel in July 2008, before free-falling to $33 (£20) a barrel in the course of 12 months. As SM went to press, the Opec crude oil basket price was $61.73 (£37).

Abdalla Salem El-Badri, Opec's secretary general, said low prices were not sustainable, because it resulted in a lack of investment in production. Global demand will fall to 84.2 million barrels per day (bpd) this year as a result of the downturn, compared with 85.6 million bpd in 2008. This will not recover until 2011, when Opec estimates demand will reach the same level as last year.


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