Kuwaiti Oil Minister Essam al-Marzouk has said he expects oil prices to stay between $50 and $55 a barrel and that the market will rebalance by the end of the year.
Marzouk, who heads an oil producers' committee that monitors compliance to output cuts, told Kuwait’s Al-Rai newspaper in an interview published on Wednesday that “demand for oil will pick up this quarter,” and the rate of the fall in crude inventories will accelerate.
Global oil producers will be able to decide in November whether to extend their agreement on output cuts further beyond March 2018 or begin to phase it out from that date, Marzouq was quoted as saying.
“OPEC’s strategy is on the right track... Monthly and weekly indicators for the drop in crude stocks show this strategy is correct,” the minister said.
Oil supply-demand balance
Marzouk said he also expect that a balance between oil supply and demand will be reached by the end of 2017, ending years of supply glut that sent prices crashing.
States from the Organisation of Petroleum Exporting Countries and other oil producers including Russia agreed in November last year to cut output for six months, in a bid to raise prices following a collapse that began in mid-2014.
The deal was extended for another nine months until March 2018.
Oil prices have recovered partially as a result and have been hovering around $50 a barrel.
Marzouk said that OPEC will decide at its next meeting in November whether to extend the production cuts deal beyond next March.
He also predicted that oil demand would increase in the current quarter while inventories would drop more than expected, Al Rai reported.
The minister said Hurricane Harvey in the United States did not have a major impact on oil prices.