PARIS (Reuters) - Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) is living with an oil price assumption of $50 a barrel this year but that could rise to $60 next year and $80 in the next two years, a senior company executive said on Thursday.
"We're living with $50," Jean-Jacques Mosconi, head of strategy and planning at Total, told the Reuters Global Energy Summit.
"Next year we see more than that, $60, and then we may be back to $80. Our view is we're going back to $80 in the next two years."
U.S. crude has recovered from a low of $32.40 in December, its weakest in nearly five years, to a high this week of $69.05, its strongest since early November.
Earlier on Thursday, U.S. investment bank Goldman Sachs raised its end of 2009 oil forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95.
Mosconi said oil at $80 a barrel would be a normal level as far as Total was concerned, but a gradual price rise would be better for a still fragile world economy.
"If the price is rising too much and too quickly, this might damage an economy, which is still not in great shape ... the global economy won't be able to absorb it," he said.
For oil companies, a quicker price rise would not be unwelcome, but Total preferred to take a cautious view for planning purposes.
"It might come back in a shorter period of time, but we are sending an internal and an external message. We prefer our teams to live with $50 for this year and $60 for next year," he added.
OPEC
Mosconi said efforts by the Organization of the Petroleum Exporting Countries (OPEC) have been partly responsible for the recovery in the price of oil.
Since September last year, OPEC has said it would reduce oil supplies by 4.2 million barrels per day (bpd) and has delivered roughly 80 percent of the pledged curbs.
"Without the strong OPEC reaction, the price might have gone down to $20 or $10 a barrel," he said.
Mosconi saw a weak outlook for gasoline demand. He said gasoline demand in developed countries would not recover even with potential economic recovery next year and has reflected the view into its business strategy.
Mosconi referred to the plan announced by U.S. President Barack Obama's White House that will push auto companies into making more small cars and said such a plan would long-term impact on gasoline demand.
"We have to take this into account to make forecasts. Clearly, gasoline consumption is declining," he said. Continued...
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