An end in sight to the oil glut, says BP

Yorkshire Post - Business - - MARKET REPORT -

STRONG DE­MAND should start to cut into an oil glut around the end of this year, even as new Ira­nian sup­plies en­ter the mar­ket and doubts per­sist over whether ma­jor oil pro­duc­ers will re­duce out­put, BP’s chief econ­o­mist said yes­ter­day.

But a stock over­hang could still linger for at least a year.

Oil prices dropped to their low­est since 2003 last month un­der the pres­sure of a sup­ply sur­plus of around 1 mil­lion bar­rels per day ( bpd).

Saudi Oil Min­is­ter Ali Al- Naimi has ruled out im­mi­nent OPEC pro­duc­tion cuts, al­though he said on Tues­day he was con­fi­dent more na­tions would join a pact to freeze out­put. Fel­low OPEC mem­ber, Iran, mean­while, is ea­ger to in­crease out­put af­ter sanc­tions were lifted.

BP’s Spencer Dale said he could not pre­dict what OPEC and other ma­jor pro­duc­ers would do and said promised freezes had come from na­tions un­likely to in­crease out­put any­way.

“What is clear, is the oil mar­ket is be­hav­ing like any mar­ket. Prices are fall­ing quite sharply and, as a re­sponse, de­mand is grow­ing quite fast. Last year, global oil de­mand grew by twice its 10- year av­er­age,” he said.

“Even al­low­ing for Ira­nian sup­ply, I see flat to fall­ing global sup­plies this year and so I think you’ll see a big swing in the mar­ket. By the end of this year, the mar­ket moves closer into bal­ance.”

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.