France's Total expects oil prices to remain strong

France's Total SA, one of the world's biggest oil companies, said Wednesday it expects oil prices to remain high and plans to raise its production.

"We consider that the price of energy, the price of oil will remain strong, high," Total Chief Executive Christophe de Margerie said in an Internet presentation to investors.

Oil futures prices peaked at a record high of $147.27 a barrel in New York on July 11, but have since backed off those levels as U.S. demand for gasoline has weakened.

Global oil demand will be lower than expected this year and next as weak economic conditions in advanced economies offset growing demand in the developing world, the International Energy Agency said in its monthly report, released on Wednesday.

Oil prices rose Wednesday after the Organization of Petroleum Exporting Countries said it would cut more than 500,000 barrels a day of production that exceed its self-imposed output quotas.

The move was viewed as a compromise meant to avoid new turmoil in crude markets while seeking to prevent prices from falling too far.

Light, sweet crude for October delivery was trading near $104 a barrel in morning dealings in New York on Wednesday, up from the front-month contract's close of $77.49 on Sept. 10, 2007.

"We see the result of OPEC as being a good sign" of Total's expectations that "demand still strong even if it has changed more than we could expect," de Margerie said.

Total, France's biggest company by market value, forecast 2 to 3 percent growth in production over the next decade based on a $100-a-barrel scenario. A presentation to analysts forecast Total's production at just below 3 million barrels of oil equivalent a day by 2016, compared with about 2.5 million barrels a day in 2010.

The company also said it is raising its interim dividend by 14 percent to 1.14 euros (61 cents) a share.

It is also raising research and development spending to 5.5 billion euros from now through 2013, compared with 700 million euros in 2008 alone.

The world's fourth-largest oil and gas company reported last month that profit climbed 38.7 percent in the second quarter to 4.73 billion euros ($7.38 billion) on the back of strong oil prices.