OIL TO FALL?

BHP backs forecasts of steep drop in oil price
August 31, 2005

Sydney - The price of oil is likely to fall to $40-$50 per barrel in the next 12 months, BHP Billiton chief executive Chip Goodyear predicted on Wednesday.

The head of the Anglo-Australian resources giant said the crude price, which was approaching $71 on Wednesday in the wake of Hurricane Katrina's devastation of the US Gulf Coast, would fall over a 12-month time span as supply increased.

"In a year, I think you're probably looking at a range of probably the 40-50 US dollar mark," Goodyear told the Forbes Global chief executive officer Conference in Sydney.

Goodyear said there would be upward pressure on oil prices over the long-term due to increased demand from developing countries.

"Long term, I think we're all aware that there are billions of people out there in the world that have something that we are used to, which is the automobile, that they aspire to," he said.

"That's going to increase the amount of demand for petroleum products."

Conference organiser, billionaire business publisher Steve Forbes, predicted on Tuesday that oil prices would crash from this week's record highs as a speculative market bubble bursts.

Forbes said oil would fall to $30-$35 a barrel within a year. - AFP