LONDON - Oil prices are likely to trade toward the lower end of a $60-$90 a barrel range for now and there is little sign of any demand growth, BP's chief executive said on Tuesday.
The cautious outlook came alongside BP's second-quarter earnings which fell 53 percent partly because of lower oil prices and suggests little prospect of an imminent return to last year's record earnings.
"In terms of the oil price, we expect there to be continued short-term volatility as supply and demand come back into balance," BP's Tony Hayward told reporters at a news conference.
"$60-$90 is probably a sensible range. I suppose in the near term you would expect us to be closer to the bottom end of that range."
The head of BP, Europe's second-largest oil company by market value, was more bearish on the outlook for oil than some in the industry. Producer group OPEC said earlier in July there were some signs of recovery in demand.
BP shares fell 3.1 percent on Tuesday, more than the 1.4 percent drop at rival Royal Dutch Shell, and oil fell almost $2 to below $67 a barrel.
Oil collapsed from record high above $147 in July last year to below $33 by December as the economic crisis hit demand, resulting in sharply lower earnings for oil companies and the governments of producer countries.
Forecasters such as OPEC expect world oil demand to return to growth in 2010 as the economy recovers, and analysts said hopes of recovery have played a part in oil's rally in 2009 to a high for the year of $73.38 in June.
But Hayward said he did not expect demand to rebound rapidly.
"We see little evidence of any growth in demand and expect the recovery to be long and drawn out," he said in a statement.
Analysts said many potential investors in BP also tookg a cautious view of the oil price rally, believing it to be based on hopes about a demand rebound rather than any actual increase.
"I think a lot of people don't really believe the oil price. If you look at the rest of the operating environment -- refining margins, gas prices -- they are all on their knees," said Peter Hitchens, analyst at Panmure Gordon.
"The oil price is up not on the back of fundamentals but on the back of the potential of a recovery coming though."
The cautious outlook came alongside BP's second-quarter earnings which fell 53 percent partly because of lower oil prices and suggests little prospect of an imminent return to last year's record earnings.
"In terms of the oil price, we expect there to be continued short-term volatility as supply and demand come back into balance," BP's Tony Hayward told reporters at a news conference.
"$60-$90 is probably a sensible range. I suppose in the near term you would expect us to be closer to the bottom end of that range."
The head of BP, Europe's second-largest oil company by market value, was more bearish on the outlook for oil than some in the industry. Producer group OPEC said earlier in July there were some signs of recovery in demand.
BP shares fell 3.1 percent on Tuesday, more than the 1.4 percent drop at rival Royal Dutch Shell, and oil fell almost $2 to below $67 a barrel.
Oil collapsed from record high above $147 in July last year to below $33 by December as the economic crisis hit demand, resulting in sharply lower earnings for oil companies and the governments of producer countries.
Forecasters such as OPEC expect world oil demand to return to growth in 2010 as the economy recovers, and analysts said hopes of recovery have played a part in oil's rally in 2009 to a high for the year of $73.38 in June.
But Hayward said he did not expect demand to rebound rapidly.
"We see little evidence of any growth in demand and expect the recovery to be long and drawn out," he said in a statement.
Analysts said many potential investors in BP also tookg a cautious view of the oil price rally, believing it to be based on hopes about a demand rebound rather than any actual increase.
"I think a lot of people don't really believe the oil price. If you look at the rest of the operating environment -- refining margins, gas prices -- they are all on their knees," said Peter Hitchens, analyst at Panmure Gordon.
"The oil price is up not on the back of fundamentals but on the back of the potential of a recovery coming though."
