Bloomberg, on Monday reported Khalid Al-Falih, Saudi Arabia's Energy Minister as expressing optimism that oil-price could recover to $60/bbl by the end of 2016, just weeks after agreeing to cut supply for the first time in eight years.
According to him, “it is not unthinkable that we could see $60 by year-end,” Al-Falih said at the World Energy Congress in Istanbul, Turkey.
The oil market has “shifted” since 2014, when Saudi Arabia led the Organization of Petroleum Exporting Countries (OPEC) to abandon its production ceiling in pursuit of market share, and it is now time to do something different, Al-Falih said.
OPEC decided last month to limit production to a range of 32.5 MMbopd to 33 MMbopd to accelerate the “ongoing drawdown of the stock overhang and bring the rebalancing” in crude markets forward.
OPEC’s framework agreement to limit output must accommodate Libya and Nigeria, Al-Falih said. Both nations plan to restore output lost to war and militant attacks. Al-Falih made no mention of Iran, which has also said it wants to continue raising production after international sanctions were eased this year.
Ministers from some of the largest oil-producing nations are gathering at the World Energy Congress in Turkey. With benchmark Brent crude trading below $52/bbl—less than half its price in mid-2014—oil-rich countries from Saudi Arabia to Russia have come under budgetary pressure, while major companies are set to cut investment for a third year.
Source: Independentnig.com
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