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LONDON, April 21 (Reuters) - The oil price will stay low for
some time as supply exceeds demand and the current situation on
global oil markets is reminiscent of the 1980s oil glut, former
BP boss John Browne said on Tuesday.
U.S. crude prices dropped below $0 for the first time ever
on Monday, with May futures for U.S. crude plummeting to
-$37.63 a barrel, though the prices returned to positive
territory on Tuesday.
Browne, who ran BP from 1995 to 2007, said the negative
prices were a U.S. issue due to a lack of storage, though he
said across the world demand was down while production was still
high.
"The prices will be very low and I think they will remain
low and very volatile for some considerable time," Browne told
the BBC. "There is still a lot of oil being produced that is
going into storage and not being used.
"This is very reminiscent of a time in the mid-1980s when
exactly the same situation happened - too much supply, too
little demand and prices of oil stayed low for 17 years."
The 1980s glut - when oil prices tumbled in the mid 1980s -
ultimately led to geopolitical tremors across the world: the
Soviet Union collapsed in 1991 while Algeria faced a political
crisis that spawned a deadly civil war.
Browne said the demand for hydrocarbons would continue to be
weak, partly as a result of a greater awareness of climate
change.
"Demand for hydrocarbons will continue to be weak," he said.
"And that demand will be filled primarily by those who have no
choice but to produce oil - so the state oil companies of the
world."
(Reporting by Guy Faulconbridge; editing by Kate Holton)