The oil market is expected to become more balanced in 2016 as demand continues to grow, OPEC Secretary-General Abdullah al-Badri announced on Monday, reported Reuters.
“The expectation is that the market will return to more balance in 2016,” he said in a speech at an Asian ministerial energy roundtable in the Qatari capital Doha.
“We see global oil demand maintaining its recent healthy growth. We see less non-OPEC supply. And we see an increase in the demand for OPEC crude,” Badri said.
Most of the oil supply increases in recent years have come from high-cost production, Badri explained, referring implicitly to US shale oil.
“The market is now taking on board this new reality and gradually resetting itself, as we can see with falling non-OPEC supply growth and stronger demand,” he added.
According to Bloomberg, energy expert Daniel Yergin voiced the same view, adding that the US is now the new swing producer of oil, with much room for efficiency gains.
He made these remarks in a speech in Abu Dhabi, explaining further that oil market will rebalance in 2016 or 2017, as demand grows between 1.2m b/d and 1.5m b/d through 2020.