Baku, Azerbaijan, Dec. 4
In the six months since the Conference last convened here in Vienna, we have witnessed continued volatility in the global oil market. Prices have continued to drop with the OPEC Reference Basket decreasing from a monthly average of around $60 per barrel in June to just over $41 per barrel in November, said in his opening address to the 168th Meeting of the OPEC Conference on 4 December minister of State for Petroleum Resources of Nigeria and President of the OPEC Conference Emmanuel Ibe Kachikwu.
"This decline reflects the continued oversupply in the market with crude and product storage at record highs. There is no doubt that our industry is in the midst of another challenging cycle. OPEC has been monitoring this situation very closely, and these issues will be the focus of our discussions here today as we consider the developments of the past six months and the outlook for next year", - he said.
"Taking a look at the economy, global economic growth in 2015 is set to be 3.1 per cent. This is slightly lower than that forecast at the last meeting of the Conference in June this year, mainly due to a deceleration in some emerging and developing countries. Next year looks brighter, with global growth forecast to be 3.4%.
World oil demand in 2015 will grow by 1.5 million barrels per day, up from 1 million barrels per day in 2014. Next year, we foresee growth of 1.3 million barrels per day to average 94.1 million barrels per day, with most of this growth coming from non-OECD countries"- he added.
He went on to say that as far as supply is concerned, non-OPEC countries will continue to see significantly reduced production growth as compared to past years. "In fact, in 2016, we anticipate a contraction in non-OPEC oil supply.
This downward trend stems mainly from the impact of investment cutbacks and the drop in US tight oil output, which has been declining since May of this year. This is clearly illustrated by the drop in the number of newly drilled wells and the reduction by half of active drilling wells"- he said.
"These developments indicate the onset of a more balanced market in 2016, with demand for OPEC crude expected to rise by 1.2 million barrels per day to average 30.8 million barrels per day for the year"- he added.