Petrobras' Costa Says Oil Prices to Rise Again, Valor Reports

By Jeb Blount

Oct. 27 (Bloomberg) -- Oil prices will rebound because of scarce supply, said Paulo Roberto Costa, head of refining at Petroleo Brasileiro SA, Brazil's state-controlled oil company, the Valor Economico newspaper reported.

Declining output from existing fields, means new discoveries of 8.5 million barrels a day are needed to meet demand, Valor quoted Costa as saying.

Delays in bringing new fields online would hamper the ability to meet global oil consumption, even if it remains at the current level of about 85 million barrels a day, Costa was quoted as saying.

Oil futures traded in New York have plunged by more than half since touching a record $147.27 a barrel on July 11. The December contract fell as low as $61.30 in early trading today.

Oil at $60 makes it uneconomical to explore for oil in Canadian tar sands and in Venezuela's Orinoco basin, Costa said.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net