EMEA News
Qatar Says Crude Prices Have Hit Bottom, Predicts 2016 Recovery
Mohammed al-Sada, energy minister for Qatar, believes global crude prices have "bottomed out" and will recover in the New Year, Platts reports.
Al-Sada bases his prediction on reports that world GDP growth will be 3.4 percent in 2016, compared to an expected 3.1 percent this year, which "would result in an increase in global oil demand by 1.3 million barrels per day to 1.5 million barrels per day (bpd)."
Al-Sada pointed to "increasing demand from both developed and emerging markets" in predicting that the call on crude from the Organization of the Petroleum Exporting Countries (OPEC) will reach 30.5 million bpd in 2016, compared to 29.3 million bpd this year.
Platts notes that al-Sada's views were echoed by Abdalla el-Badri, secretary general for OPEC, who stated at a recent Kuwait conference that a slowdown in production from non-OPEC producers and an increase in global demand makes him hopeful of a more balanced 2016 market.
However, both men expressed concerns moving forward into the New Year.
Badri warns that the market remains oversupplied, and al-Sada is concerned that a 20 percent decrease in capital spending by oil companies this year compared to 2014 could result in eventual production shortfalls.
In September, the International Energy Agency said OPEC's strategy of refusing to cut production to keep market share should see it win the current price war.
