Novak sees oil market rebalancing in first quarter 2018
Astana, 11 June (Argus) — World oil markets should return to balance in the first quarter of next year once global demand picks up after the colder winter months, Russian energy minister Alexander Novak said in Astana today.
"It is a question of returning to normal stock [levels], an average of five years," Novak said following a meeting with the Kazakh and Saudi energy ministers Kanat Bozumbayev and Khalid al-Falih, respectively. "We see this trend that stocks are reducing."
The 24 Opec and non-Opec countries that agreed late last year to cut their collective crude oil output by close to 1.8mn b/d for six months decided in May to extend the agreement for a further nine months to March 2018 to allow more time for global oil supply and demand to return to balance.
Novak said he felt this rebalancing will be possible in the first quarter of next year, "when demand begins to recover after the winter low."
Al-Falih said on 10 June in Astana that, while it may still be too early to see the full impact of the production cuts on the global oil market, the "overall trend" suggested that it was on its way to rebalancing.
Speaking today, al-Falih said that global oil stocks were already beginning to fall, and that the rebalancing process would accelerate over the next 3-4 months.