BP’s chief financial officer believes oil prices have returned to “more normal” levels after a volatile few years.
Speaking at the Adipec conference in Abu Dhabi, Brian Gilvary said the market was “coming back into balance” and that most operators could “cope” with recent prices.
Mr Gilvary’s comments echoed those of Opec secretary general Mohammad Barkindo, who earlier this week said there were clear signs that the oil market was re-balancing at an “accelerated pace”.
The Brent crude price sank from $110 per barrel mid-2014 to less than $30 at the start of 2016 due to chronic over-supply in the market.
The price has stayed between $45-$55 for much of this year, thanks in part to production cuts agreed by Opec and its allies.
It recently edged above $30 due to geopolitical uncertainty in some regions.
Chief executives from a group of US oil service companies said yesterday at Adipec that they expected prices between $50-$60 to prevail.
BP said in its third quarter results update at the end of last month that it was planning for a price of $50-$55 into next year.
Mr Gilvary said yesterday that a price “close to $55 seems the new norm”. He added: “We are now in a more normal situation, plus or minus $10 per barrel. Most companies can cope with that”.
Lord Jim O’Neill, former commercial secretary at the UK Treasury, said he was not as confident the price would keep to such narrow ranges.
But Lord O’Neill, an ex-Goldman Sachs economist, said predicting oil prices was even more difficult than forecasting foreign exchange movements.
He also said people “should never spend three years forecasting oil prices”.