Taqa CEO warns of oil price spike in '09

PRICE SPIKE: Barker-Homek warned oil prices could hit $200 a barrel by the end of 2009 if the recent price slump continues into next year. (Getty Images)

Oil prices could surge to $200 a barrel by the end of 2009 if the recent price slump continues into next year, the CEO of Abu Dhabi National Energy Co. (Taqa) warned on Monday.

Speaking at a forum in Dubai, Peter Barker-Homek predicted that if oil prices fell to $50 a barrel or below by the first quarter then there would be huge price spike later in the year.

“I think if prices reach $50 or breach that [level] by Q1 next year you are seeing oil at $200 by year-end,” Barker-Homek said.

Oil prices have more than halved since their all-time high above $147 a barrel in July over concerns that the global economic slowdown will hit demand for crude.

The sharp drop in prices, which are currently just below $60 a barrel, and tightening liquidity due to the global financial crisis has caused oil companies to review projects and investment plans.

“If you are an oil major you are working on three- to five-year development sites that are multi-billion dollar programmes. If you decide to stop that it doesn’t restart the next month,” Barker-Homek said.

Barker-Homek said if oil prices push back up above $70 a barrel by the first quarter of next year then prices would likely be around $80 a barrel by year-end.

“I think if prices recover to $70-$80 by Q1 we will be running at $80 by year-end,” he said.

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READERS' COMMENTS

Its a Cycle
Posted by muhammad irfan, dubai, U.A.E on Wednesday 19 November 2008 at 19:24 UAE time


I think the oil prices are down because many organisations bought oil and stocked them thinking that it will even go higher.

Mr Braker may be right because huge investment plans were in place to increase output but now due to the low prices these might not go through and then at a later stage it will creat a huge demand as OPEC has already made huge cuts, the worlds energry demand is increasing, It is just a temporary slow down in oil prices.

He needs to go to back to Economics 101
Posted by Rabie on Wednesday 19 November 2008 at 10:56 UAE time


Seeing the world around in recession and in comparison to the previous similar oil price crashes in 70's and 80's which led to GDP going down in most countries,The oil price will not see the 80 $ if OPEC continues to cut the production rate.... Every 1 % cut in oil production will lower the GDP by 0.3%... less GDP = less cash = decreased oil purchase = deep recession ...

$200!!! $500!!
Posted by DSouza on Tuesday 18 November 2008 at 18:55 UAE time


It seems that people who want to be in the news cant help trying to predict the unpredictable stuff in life! If u go thru the newspapers in July'08 when oil was $147, you had the Irani President saying it could touch $500 a barrel by Yr08-end.

There was a certain Goldman Sachs guy who also predicted $200, well, good for them, they get the media attention. As far as reality goes, well, who cares, right?

Oil Prices
Posted by Oz, Manama, Bahrain on Tuesday 18 November 2008 at 17:25 UAE time


An interesting comment, but would like to understand the economic rationale that would anchor his belief!!

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