Forecast came true

$100 oil isn’t coming back for a ‘long time’
4 february 2015

$100 oil isn’t coming back for a ‘long time’: BP CEO

It’s like 1986 all over again, says Bob Dudley

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BP is settling in for the long haul of lower oil prices.

Try to put $100-a-barrel oil out of your mind for a “long time.”

That was the advice of BP PLC Chief Executive Officer Bob Dudley on Tuesday, after the oil giant was forced to slash spending and posted a loss as the price of crude-oil hit home in the fourth quarter.

Dudley suggested the world get comfortable with sub-$60 oil in an interview with Bloomberg TV, saying the price could stay in a range below that level for up to three years. Also on Tuesday, he told CNBC that $50-a-barrel was likely the price investors would have to get used to.

“It will be a long time before we see $100 again,” he told Bloomberg.

Dudley said it was almost like 1986 all over again, when oil dropped to $10 a barrel from $30 a barrel and didn’t recover until Iraq invaded Kuwait in 1990. Undoubtedly, some oil traders, still in diapers at the time, won’t be old enough to remember that.

“The fundamental supply and demand does remind me of 1986 a bit, where we could go into a period in this decade of lower oil prices,” Dudley said. The biggest problem, he said, is that oil stocks are filling up around the world and places like China aren’t growing as fast.

“All of these things have led to lots of stocks building up and you may start seeing it filling up some ships. And when, traditionally, that happens it can go on for quite awhile,” said Dudley.

It was a different tone than Organization of Petroleum Exporting Countries Secretary-General Abdulla al-Badri, who told Reuters last week that a rebound may be at hand for oil. He said oil could reach $200 a barrel if production is cut back.

Barbara Kollmeyer

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