Kuwaiti experts forecast upbeat oil prices' scenario

By Osama Jalal

KUWAIT, March 9 (KUNA) — Oil price is forecast to reach USD 50 per barrel by 2016 due to prospected positive conditions in the market namely restoration of balance between supply and demand, according to two Kuwaiti analysts.
Khaled Boodai, chairman of Al-Ofoq Center for Administrative Consultation, said in an interview with Kuwait News Agency (KUNA) that the recent tentative agreement among producers to freeze the crude output at January’s level was the main factor that has boosted prices.
The market has begun absorbing the glut, amid forecast solution to the “prices’ crisis,” Boodai said, however he indicated that the prices would not soar, as happened months ago.
Past weeks witnessed gradual hike of the crude prices. The Kuwaiti oil has climbed USD 10 “and this is assuring with respect of restoring balance after the bearish period; now it is gradually moving up and this means we have begun surpassing the crisis,” he said.
He attributed the moderate forecast increase — rather than soaring — of the crude prices to various factors such as the global economic crisis and the recession in China.
The oil price is forecast to reach USD 45-50 pb by end of 2016. The price per barrel has increased by 50 percent in a quarter year, “and this is a good indication.” Delving further into the issue, Boodai said global consumption of the crude oil is mounting due to population growth and this largely contributes to “sucking up the excessive supplies. Now demand is higher than supplies, and this will realize balance in the market, provided the output remains stable.” Mohammad Al-Shatti, another Kuwaiti oil expert, told KUNA there are forecasts putting the prospected price at USD 41 pb, “that is equal to USD 33 per barrel for the Kuwaiti crude oil.” It will reach USD 40 pb in April, 2016, and USD 49 pb in December this year, he said.
Average global demand for oil in 2015 reached 95.3 million barrels per day, in comparison to non-OPEC supplies estimated at 64.9 million bpd, while OPEC’s output stood at 32.2 million bpd. This meant, Al-Shatti said, “there was an imbalance by 1.7 million barrels per day,” nevertheless conditions now appeared tending for restoring balance, where the global demand would reach 97.1 million bpd.
Non-OPEC supplies are forecast at 64.2 million bpd, while OPEC’s production will rise to 33.2 million bpd, thus the imbalance will shrink by 300,000 bpd. “Such a development will impact positively on the prices,” said the expert Al-Shatti to the Kuwaiti news network.
He added that there is a prevailing belief that OPEC’s output will remain in the range of 32.2 million bpd, with Saudi quota at 10.2 million bpd, Iraq 4.4 million pbd and Iran 3.5 million bpd. (end) osj.rk