Oil prices 'to reach $80 early next year'

25 September 2009

Oil prices could begin to rise in the next few months, before stabilising at around $80 (€54.52) a barrel by early next year, it has been claimed.

Hugo Chavez, president of Opec nation Venezuela, told Reuters there is currently an overload of oil supply on the market.

However, he insisted that there would be no need to cut production further in the future, with prices likely to pick up once the inventory build-up begins to subside.

So far this year, Opec has resisted the urge to reduce its output targets in order to boost prices, having curbed supply by 4.2 million barrels in 2008 to balance out a sharp fall in demand.

Mr Chavez said: "We are not going to cut more, but the price is stabilising. I think that it's going to reach $80 at the start of next year."

The outlook may prompt home heating oil customers to stock up on supplies of the domestic fuel now in order to avoid the potential effects of any increase in crude prices.

US crude for November delivery fell by more than four per cent on Thursday to settle at $65.89, while London Brent crude dropped $3.17 to close at $64.82.

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