by Jerome a Paris
Sat Sep 8th, 2007 at 12:55:25 PM EST
Price of oil will continue to rise, says Total chief
High oil prices are here to stay, according to Total, the French oil multinational, which has raised its forecast value of a barrel of crude from $40 to $60 as it predicts continuing strong demand for oil, rising costs and political constraints on production.
Total's decision to bet on a higher oil price is based on fundamentals, said Christophe de Margerie, the chief executive, who said the recent turmoil in the debt markets had shaken most of the speculative money out of oil futures. Despite the loss of the hot money, the price of Brent crude was about $77 per barrel yesterday, close to its peak of $78.
"Demand is still strong in Asia, there is strong demand in the Middle East for electricity generation and water purification. The price will remain high," he said.
The Total chief said that biofuels would not provide an answer for the world's energy needs, insisting that hydrocarbons and, increasingly, nuclear power, would supply 80 per cent of the world's energy for the next 50 years.
Fundamentals don't justify $70 oil price: Exxon CEO
CALGARY (Reuters) - Oil market fundamentals do not justify a crude oil price as high as $70 a barrel, which is below today's level, Exxon Mobil Corp's top executive said on Friday.
"I cannot explain why we have $70 oil. The fundamentals behind supply and demand do not support $70 oil. The fundamentals support something much less," Exxon Mobil CEO Rex Tillerson told a business roundtable at the Spruce Meadows equestrian facility on the outskirts of Calgary.
"There's something else going on there that I don't get," Tillerson said, speaking to an audience of business and political leaders about energy security.
He said he believes Saudi Arabia has the oil resources and technological ability to boost its daily output capacity to 12.5 million barrels. However, he did not give a timeframe for such an increase.