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Last Updated: Friday, 4 November 2005, 09:44 GMT
BP boss predicts oil price fall
Lord Browne, BP chief executive
The BP boss believes prices can only go one way
The chief executive of BP, Lord Browne, has said that crude oil prices are "unsustainably high" and will fall as consumers seek cheaper energy sources.

Oil prices have risen 40% this year following a shortage of global refining capacity and disruptions to supply.

But the BP boss said an increase in the amount of oil being pumped would eventually force prices down.

In the longer term, the availability of cheaper energy sources would force prices down further, Lord Browne added.

Price peak

Prices peaked at $70.85 a barrel in late August after Hurricane Katrina struck New Orleans but have since fallen back below the $60 level.

"People don't like to be held to ransom."
Lord Browne, BP chief executive

Speaking in Singapore, Lord Browne said members of the Opec oil producing cartel would ultimately determine how far prices fall, but added that many leading producing nations believed prices should settle at about $40.

"Our view is that the price of oil is unsustainably high and will come down," he said.

"People don't like to be held to ransom."

Political concerns

Opec is pumping more oil than at any time in 25 years.

However, prices have continued to rise amid concerns about limited refining capacity and growing tension between the international community and Iran, a leading oil producer.

In addition, output from the Gulf of Mexico region is still way below normal levels following damage caused by Hurricanes Katrina and Rita.

Separately, the Chinese government has said it is keen to work more closely with BP, already a major investor in the country.

Lord Browne met Chinese officials and executives from China's three largest oil producers on Thursday.

"I hope both sides will further use each other's strengths to expand exchanges and cooperation in the fields of petrochemicals and renewable energy," said Zeng Peiyan, Chinese vice premier.

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