Oil price recovery anticipated for 2016
Qatar's Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada said oil prices should rise in 2016
As the global economy recovers and the demand for oil improves, Qatar's oil minister has said he sees signs of an oil price rise in 2016.
The Minister of Energy and Industry H E Dr Mohammed bin Saleh Al Sada – who is also acting president of OPEC, the Organization of the Petroleum Exporting Countries – said in a statement that the oil price has "bottomed out" and he sees signs of recovery next year, because of a recovery in the global economy and growth in demand.
With world GDP growth in 2016 slated to be 3.4% as against an expected 3.1% in 2015, he said that this would result in an increase in global oil demand by 1.3 to 1.5 million barrels per day (bpd).
The statement said that growth in supplies from non-OPEC producers over the past five years has reduced significantly in 2015 and is likely to show zero to negative growth in 2016.
"On the other hand, call on OPEC oil is expected to become healthier from 29.3 million bpd in 2015 to 30.5 million bpd in 2016 as indicated by increasing demand from both developed and emerging markets," it said.
Current low market prices have spurred oil firms to reduce their capital expenditure by almost 20%this year from $650 billion in 2014, Al Sada said.
"This trend of reducing investment in the oil industry could result in production shortfalls down the line," the statement continued.
Venezuela has been trying to persuade oil producers to cut output to boost prices and said on Thursday 8 October, a technical meeting of OPEC and other crude-producing countries would take place on October 21, The Peninsula reported.
On Friday 9 October, oil edged up in New York and slipped in London as traders booked profits from the week's rally on the back of anticipation for oversupply relief from lower US crude production.
US benchmark West Texas Intermediate (WTI) for delivery in November rose 20 cents to $49.63 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for delivery in November, the global benchmark, fell to $52.65 a barrel in London, a loss of 40 cents from Thursday's settlement.