World

Optimistic OPEC secretary-general expects balanced oil market in 2016

By the end of this year and next year, the global oil market will be in a fair and sensible condition. This is according to the expectation of the Organization of the Petroleum Exporting Countries secretary-general on Sunday.

Abdullah al-Badri also informed reporters on the sidelines of an oil industry conference in Kuwait that OPEC was positive due to the rise in oil demand. He added that if non-OPEC oil producers will be willing to work with OPEC, they are willing as well to deal with them, as reported by as StreetInsider.com.

The oil industry's "best days are yet to come" as demand will increase to 110 million barrels a day by 2040, said the secretary-general on Sunday at a conference in Kuwait City.

The missing part in crude oil supply and demand is due to close in the third quarter of 2016, according to Mohammad Ghazi Al-Mutairi, chief executive officer of state-run Kuwait National Petroleum Co, at the same event, as reported by The Sydney Morning Herald.

"At OPEC, we are hopeful that the industry will see a more balanced oil market in 2016," El-Badri said. "We have recently seen a contraction in production from some non-OPEC producers and an uptick in demand growth."

Brent crude which is a global pricing criterion fell 8.2% this year and dropped 41% in the last 12 months. In London, the deal closed Friday at $US52.65 a barrel. The OPEC led by Saudi Arabia and other Gulf Arab producers have maintained the group's production goal fixed to keep market share among increasing output from non-OPEC producers.

Officials of both parties will meet in Vienna later this month to talk about the market, according to the report of The Sydney Morning Herald.

The decision of OPEC to fix its output target at 30 million barrels a day only is the "ideal solution" to balance again the market and to support prices, said Kuwait Oil Minister Ali Al-Omair at the conference.

The secretary-general said that the market is still oversupplied and stocks are above their 5-year average. He added that the world crude output is at 75 million barrels a day and other liquids add almost 18 million barrels a day to supply the world.

On Monday, the Kuwait's oil minister said that as of the moment, there are no calls from within OPEC to make changes on the oil-producing group's output policy. A market exit by high-cost producers might help uplift oil prices in 2016, the Daily Mail reports.

"Today there are no ideas or demands from the member states to make any big change in OPEC's decision," Kuwait Oil Minister Ali al-Omair told Reuters, referring to OPEC's decision in November 2014 to keep output unchanged.

According to him, any effect on policy regarding Indonesia's return to the OPEC would be told at the group's next meeting. The technical meeting invited seven to eight countries including all OPEC countries and will be held in Vienna on October 21st.