Riyadh | The global oil market should be balanced early next year, the president of Saudi Aramco said today, after over-supply drove prices to multi-year lows in 2016.
“The gap between supply and demand is closing,” Amin Nasser, who is also the state-owned oil company’s chief executive, told an international energy forum.
He said Aramco’s analysis sees the market “balanced by the first half of 2017.”
Last week, the chief of the International Energy Agency 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 Organization of the Petroleum Exporting Countries led by Saudi Arabia agreed in September on a deal to trim production.
The OPEC deal which aims to stabilise prices is the first to limit production since 2008 but details will only be determined during the group’s meeting on November 30 in Vienna.
On Saturday, OPEC officials held talks with Russia and other non-cartel members in Vienna to debate how to implement the plan aimed at cutting oil output.
OPEC members Iraq, Iran, Nigeria and Libya have all sought exclusion from the cartel’s exemption plan, Bloomberg News reported.
Production has outpaced demand over the past two years, with the resulting supply glut hammering prices from highs of more than USD 100 a barrel in June 2014 to near 13-year lows below USD 30 in February this year.
Prices are currently hovering near $50 a barrel.
Speaking to the KAPSARC Energy Dialogue, Nasser also said Saudi Aramco plans “hopefully next year” to begin issuing quarterly results ahead of a stock market listing.
This would provide better data for potential investors, he said.
Under a wide-ranging plan to diversify its oil-dependent economy, the kingdom plans to float less than five percent of Saudi Aramco on the stock market to help create the world’s biggest state investment fund.
“The preparation is going well for the IPO,” which could take place in 2018, and would be the biggest in history.
Nasser said Aramco would “for sure” list on Saudi Arabia’s bourse but is also looking abroad including in New York, Tokyo and Hong Kong.