Saudi Aramco CEO predicts oil market balance by early 2017

RIYADH — The global oil market should be balanced early next year, the president of Saudi Aramco said on Tuesday, after over-supply drove prices to multi-year lows in 2016.

“The gap between supply and demand is closing,” Amin Nasser told an international energy forum. He said the state oil company’s analysis sees the market “balanced by the first half of 2017”.

Last week, the chief of the International Energy Agency (IEA) said the market would rebalance earlier than expected if major crude producers implement a deal to cap output when they meet next month.

Under current conditions, the IEA expects global output to exceed demand until the second half of 2017, Fatih Birol said in Singapore.

But he said that if OPEC and non-OPEC producers intervene in the markets, “this rebalance can be earlier than the second half of 2017”.

In a surprise move, members of the Organisation of the Petroleum Exporting Countries led by Saudi Arabia agreed in September on a deal to trim production.

Meanwhile, Nigeria’s President Muhammadu Buhari met on Tuesday  with leaders from the Niger Delta and representatives of militant groups who have been attacking oil facilities in the region.

This is Buhari’s first meeting with Delta leaders since militants started a wave of attacks on oil pipelines earlier this year to get a greater share of oil revenues.

The attacks in Nigeria, an OPEC member, put four key export streams under force majeure, and led production to plunge to just 1.37 million barrels per day in May. 

This has been the lowest level since July 1988, according to the International Energy Agency, from 2.2 million barrels in January 2016.