Crude oil prices Thursday topped $52 a barrel, a four-month high, as U.S. oil inventories rose less than forecast. But at least one industry executive is predicting lower prices in the future.
It is the second time this week that prices have touched a four-month high. On Tuesday an unexpected jump in oil prices, past $51 a barrel, triggered the biggest fall off in U.S. stock prices in nearly two years. The market recovered Wednesday and extended its rally Thursday.
Oil prices in New York went above $52 a barrel and then fell back somewhat.
In Washington Wednesday, John Browne, the head of BP, the London-based multinational that is the largest oil producer in the United States, said he expects oil prices will eventually stabilize at a lower level.
"The fundamentals [of the market] now suggest that prices might remain relatively high over the long-term average, but perhaps not as high as they've been in the last year," he said.
In his remarks, made at Washington's Institute for International Economics, the British executive expressed surprise that the international economy has continued to grow even though the price of oil has climbed so high.
"The world seems to have adjusted remarkably smoothly to the increases we've experienced over the past year. I find it remarkable that, despite the increase in oil prices, world economic growth in 2004 exceeded four percent, a 30-year high," he said.
Those growth forecasts, however, are being scaled back for 2005 as Japan has recently slipped into another recession and there was no growth in the last quarter of 2004 in Germany, Italy and Holland.
But Mr. Browne did hold out the promise of an increase in supplies. He said production will grow as new oil fields come on line in Angola, the Gulf of Mexico, and in the Caspian Sea.