Oil price could drop to $30, says OPEC chief

The president of Opec yesterday predicted that crude oil prices - which broke $46 a barrel last week - would tumble to $30 a barrel next year.

The president of Opec yesterday predicted that crude oil prices - which broke $46 a barrel last week - would tumble to $30 a barrel next year.

Dismissing fears over an oil shortage, Purnomo Yusgiantoro, the head of the oil cartel, said the price of crude would stabilise in 2005, wiping out the current Iraq-induced premium.

Oil prices in New York have set fresh records in 10 of the past 11 trading days on a cocktail of fears, including the referendum on President Chavez's future in Venezuela; the turmoil at the Russian oil giant Yukos, which is battling bankruptcy; and unrest in Iraq.

Mr Yusgiantoro estimated the combination of Yukos, Iraq and Venezuela had added a psychological premium of $16 a barrel. Speaking in Jakarta, he predicted that if the premium disappeared, the price would stabilise at about $30 a barrel in 2005.

The Opec president also called for non-Opec exporters to boost output, to try to stop the oil price from breaking the psychologically important $50-a-barrel level.