Qatar’s Minister of Energy & Industry, Dr Mohammad bin Saleh Al Sada, who is also the acting President of the Organization of Petroleum Exporting Countries (OPEC), stated that the oil price has bottomed out. He sees signs of recovery in 2016. His optimism is based on the latest projected key market fundamentals for 2015 and 2016. As per this projection, world GDP growth in 2016 is slated to be 3.4% as against expected 3.1% in 2015 which would result in an increase in global oil demand by 1.3 to 1.5 mb/d.
He stated that the growth in supplies from non-OPEC producers seen over the past 5 years has substantially reduced 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 29.3mb/d in 2015 to 30.5 mb/d in 2016 as indicated by increasing demand from both developed and emerging markets.
In addition, he added that the low market prices prevailing at present has caused Oil companies to reduce their capital expenditure by almost 20% this year from $650 billion in 2014. This trend of reducing investment in the oil industry could result in production shortfalls down the line.
OPEC and non-OPEC countries are planning to meet at expert level in Vienna later this month to discuss and evaluate objectively the oil market situation in yet again changing scenario.