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Bloomberg: Oil May Rise to $150 a Barrel, Ex-Shell Chairman Says (Update1)

By Eduard Gismatullin and Francine Lacqua

Sept. 18 (Bloomberg) — Crude oil prices may rise to $150 a barrel in the next 20 years because demand is growing in China and some other developing nations and reserves are dwindling, said the former chairman of the U.K. branch of Royal Dutch Shell Plc.

The world is running out of “cheap oil,” Ronald Oxburgh, the former chairman at Shell Transport & Trading Plc, said in an interview late yesterday from Ireland. “The world is never going to run out of oil. The price is likely to rise so high, that we simply cannot afford to use it as a cheap fuel.”

Global oil demand is expected to rise about 1.3 percentage points a year from 2004, reaching 5.6 billion tons of oil equivalent in 2030, according to an International Energy Agency forecast from last year. Goldman Sachs Group Inc. yesterday raised its oil-price forecast to $95 a barrel by the end of next year.

Crude oil for October settlement traded at $81.38 a barrel on the New York Mercantile Exchange at 12:38 p.m. local time.

In 20 years “we will have energy consumption patterns changed completely,” Gundi Royle, a consultant at The National Investor, said in an interview in London. “The supply constraint at the moment is oil. There is no such thing as supply constraint and reserve constraint for gas,” which can partly substitute for crude oil along with other fuels.

To contact the reporter on this story: Eduard Gismatullin in London at [email protected]

Last Updated: September 18, 2007 12:54 EDT

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