Total expects oil to hit US$60 next year

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French major Total expects oil prices to average at $40-$45 a barrel this year and rise to an average $60 next year, a senior executive said on Wednesday. 

The company expected oil prices would rise further to $80 in 2011, Jean-Jacques Mosconi, Total’s vice president of strategy and planning, told reporters. 

Total’s price estimate for this year is slightly lower than analysts’ forecasts. In the latest poll in February, analysts’ consensus on oil prices was an average around $55 for this year.

International oil prices averaged around $95 a barrel last year and they peaked above $147 that summer. But the recession in much of the world has slashed oil demand, pushing prices down by more than $100 since then. 

Oil prices have been around $45 this week. 

Total is building the Jubail refinery in Saudi Arabia, where oil demand growth is seen as stronger than Europe. Mosconi said the company had no plans to build other refineries in the Middle East. 

The company aimed to cap the investment in the Jubail refinery at less than $10 billion. 

“$8 billion would be a good number,” he said. 

In Europe prices for refined oil products have been falling more sharply than crude oil, hitting oil companies’ profits. 

On Monday, Total and the union of oil workers said it will reduce the capacity of the Gonfreville refinery, the company’s largest in France, and cut some jobs. 

Mosconi confirmed the company would permanently shut gasoline making units, the catalytic cracker and isometric units, at Gonfreville as a part of the reorganization at the plant. 

Mosconi also said Total had no plans to sell any of its refineries in the next few years.

Copyright 2009 AFX News Limited. All Rights Reserved.

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