Crude oil may fall below $50 a barrel over the next 18 months after rising to a record $83.90 in September, said Lucio Noto, former vice chairman at Exxon Mobil Corp., the world's biggest oil company.
"We'll see $30, $40 or even $50 oil, but not $80," Noto said in a speech at a New York conference sponsored by Poten & Partners and Bloomberg LP, parent of Bloomberg News. "We're paying a lot of money for uncertainty."
Oil futures in New York climbed above $80 a barrel last month as the dollar fell to a record low against the euro, increasing the appeal of commodities as alternative investments. Gains in oil prices the past several years have been underpinned by economic growth in the U.S. and Asia and concern over supply disruptions in such locales as Nigeria and the Middle East.
Noto said the Bush administration placed too much emphasis in its energy policy on ethanol and not enough emphasis on investing in new technology to develop alternative fuels. He said Bush's administration has been "a huge disappointment."
"Energy policy is nowhere," Noto said. "Everybody's worried about prices and gas lines. Ethanol is a boondoggle. We've had benign neglect coming out of the Potomac."
Noto was chairman and chief executive officer at Mobil Corp. when the company was acquired by Exxon Corp. in 1999. He left Exxon Mobil in 2001 and became a managing partner at New York investment firm Midstream Partners LLC.