Oil markets will probably balance by the end of next year, prices rising in the medium term, according to Sultan Al Jaber, new head of Abu Dhabi National Oil.
Prices, which have swung between highs of about $42 a barrel and lows of about $27 this year, will continue to be volatile in the short term, Al Jaber said in an interview with Abu Dhabi dailies The National and Al Ittihad.
Al Jaber, named the company’s chief executive officer last month, expects “to see a slow but upwards improvement in prices in the medium term,” according to a transcript of his comments published in The National.
“2016 and 2017 will be the years during which markets will start to rebalance the gap between demand and supply,” he said.
Abu Dhabi, the capital of the United Arab Emirates, holds about 6% of the world’s oil reserves.
The UAE, a member of the Organisation of Petroleum Exporting Countries, is among at least a dozen states that said they’ll meet in Doha, Qatar, on April 17 to discuss a potential freeze in oil output to stabilise prices.
Adnoc, as the state company is known, is taking “into consideration prevailing market conditions” as it works toward a target to boost production capacity to 3.5m barrels a day, Al Jaber said, without specifying the date when that level would be reached.
The company is maintaining its current production level and aims to “remain a reliable supplier.”
The UAE. pumped about 2.89m barrels a day last month.
Abu Dhabi had been seeking to boost capacity to 3.5 million barrels daily by the end of 2017, while company officials have said the target may not be achieved until 2019.
Meanwhile, Brent crude extended declines from a four-week low after Saudi Arabia’s deputy crown prince said the world’s biggest oil exporter will freeze output only if Iran follows suit, putting in doubt the success of a proposed deal between major producers.
Brent for June settlement dropped as much as 55 cents to $38.12 a barrel.
Saudi Arabia’s Mohammed bin Salman signalled in an interview with Bloomberg if any country raises output, his nation will also increase sales.
The Saudi comments halted a more than 40% rally in oil since mid-January.
Investors have this year speculated that waning production in the US would ease a glut.
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