Global oil demand to rise by 45pct by 2050

OmanTribune cited Khalid Al Falih, Saudi Arabia’s energy minister as saying that global oil demand is expected to grow by 45 per cent by 2050 despite an international push for using more renewable sources of energy. Khalid Al Falih told an investment conference in Riyadh that the kingdom, which is the world’s biggest crude exporter, would remain a cornerstone of the global oil industry through state-owned Saudi Aramco.

The kingdom is determined to reduce inventories further through an Opec-led deal to cut crude output and raised the prospect of prolonged restraint once the pact ends to prevent a build up in excess supplies.

Mr Al Falih, speaking during an investment conference in Riyadh, said the focus remained on reducing the level of oil stocks in OECD industrialised countries to their five-year average.

The Organization of the Petroleum Exporting Countries, plus Russia and nine other producers, have cut oil output by about 1.8 million barrels per day (bpd) since January. The pact runs to March 2018, but they are considering extending it.

He said that “We are very flexible, we are keeping our options open. We are determined to do whatever it takes to bring global inventories down to the normal level which we say is the five-year average.”

The market has been concerned that, once the supply cut deal comes to an end, producers will ramp up supplies again, causing prices to fall. But Falih raised the prospect of continued output restraint to prevent this.

He added that “When we get closer to that (five-year average) we will decide how we smoothly exit the current arrangement, maybe go to a different arrangement to keep supply and demand closely balanced so we don’t have a return to higher inventories.”

The producers were leaning towards extending the deal for nine months, although any decision could be postponed until early next year depending on the market. Falih did not comment on an extension but said the cuts had reduced the supply overhang in storage by half.

He further added that “We have reduced the inventories by over 180 million barrels and we still have about 160 million barrels according to numbers I have seen last.” Source : OMANTRIBUNE Pipe Industry Co., Limited (www.wilsonpipeline.com)

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