Christophe de Margerie, the chief executive officer of Total SA, Europe's third-largest oil company, said he expects ``high prices for a long time.''
``There's not enough production capacity to meet demand,'' de Margerie said in an interview today on Europe 1, a Paris- based radio station. ``With strong demand like today and the inability to raise production, I don't see how prices could fall strongly and quickly.''
He said the French company will ``strongly'' increase its investment budget this year from the $16 billion in 2007, adding that it will probably be raised in 2009 and 2010 as well. He warned, however, that investment decisions taken now will have an impact on capacity in five years.
A Bloomberg survey of analysts published yesterday showed crude oil may rise because of declining U.S. inventories and a weakening dollar.
Fourteen of 27 analysts surveyed, or 52 percent, said oil prices will rise through Jan. 11. Eleven of the respondents, or 41 percent, said prices will fall, and two predicted little change. Last week, 53 percent of respondents said oil would drop this week.
U.S. crude-oil inventories fell 25.1 million barrels to 289.6 million barrels in the past seven weeks, according to the Energy Department.