The oil market is adequately supplied and balanced but this situation is fragile said Mohammad Sansui Barkindo, Secretary General, Organisation of Petroleum Exporting Companies.

Speaking at the India Energy Forum by CERAWeek, Barkindo said, “Our current view is that the market is currently adequately supplied and well balanced. For 2019, there is the potential for an imbalance, due to larger growth in supply. Naturally, this prognosis is subject to the critical uncertainties.”

“When you look at all the hostilities coming at the same time after nearly 8 to 9 years of global economic growth,” he said.

Barkindo pointed out current trade tensions and movement of interest rates and said that a combination of all these factors impacts all the projections of demands.

“In the short term we are also beginning to see a rise in productivity. All of these impact on the relative stability that we have been able to achieve after the long four years of this downturn that came with a hefty crunch in terms of investible in our industry,” he said.

To meet the future needs of both India, and the world; in the period up to 2040, the required global oil sector investment is estimated at $11 trillion according to Barkindo.

“Given these investment needs; consider how gravely worrying the situation was during the last market downturn, the most severe in the industry’s history. From 2014 to 2016, world oil supply growth outpaced that of oil demand, with world oil supply growing by 5.8 mb/d, while world oil demand increased by 4.3 mb/d,” he said.

“A long-absent element of stability has been reintroduced to the market, the rate of inventory draw-downs has been reversed and industry optimism and confidence abounds,” Barkindo said.

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