[KUWAIT] Global demand for crude is growing while non-Opec countries are producing less of it, helping to bring the supply and demand for oil back into equilibrium by next year, Opec's Secretary-General Abdalla Salem El-Badri and Kuwait's oil minister said.
"The current situation in the market is positive," Mr El-Badri said on Monday at a conference in Kuwait City. "I expect to see a balanced market in 2016, if the current situation persists." Demand for crude from the Organization of Petroleum Exporting Countries will increase this year and next, he said.
Opec's commitment to keeping its output target at 30 million barrels a day is the "ideal solution" to re-balance the market and support prices, and the group has no plans to change the level before its next meeting in December, Kuwaiti Oil Minister Ali Al-Omair said at the conference. No members of the organization are currently calling for such a change, he said.
Opec, led by Saudi Arabia and other Gulf Arab producers, kept the group's official production target unchanged at its last meeting in June and has exceeded it for 16 consecutive months, according to data compiled by Bloomberg, in an effort to maintain market share amid a worldwide supply glut. Officials from Opec and non-member states plan to meet at an expert level this month in Vienna to discuss the market, Mr El-Badri said. Brent crude, a global pricing benchmark, slipped 12 per cent this year and tumbled 44 per cent in the last 12 months. The contract added 32 cents to US$50.18 a barrel on the London-based ICE Futures Europe exchange at 1.30 pm Singapore time on Tuesday.
The gap between supply and demand for crude should close in the third quarter of 2016, Mohammad Ghazi Al-Mutairi, chief executive officer of state-run Kuwait National Petroleum Co, said at the event. Al-Omair, Kuwait's oil minister, said the market is set for a re-balancing next year as output from "high- cost" producers is slowing amid the decline in prices while demand is improving on better world economic growth.
Opec forecasts demand for its crude in 2016 to be 30.8 million barrels a day, the group said Monday in its monthly report, revising its demand outlook upward by half a million barrels. OPEC's members pumped about 31.57 million barrels a day in September, the most since 2012, amid stronger demand, according to the report.