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BP sees oil prices little changed, eyes on Opec

02 May 2017 11:13 (+01:00 GMT)
BP sees oil prices little changed, eyes on Opec

London, 2 May (Argus) — The oil market will continue to rebalance in 2017 thanks to strong global demand growth, according to BP.

But the timing and extent of this will depend on whether Opec cuts are extended into the second half of the year, and on "the extent to which US tight oil responds to the more favourable outlook", BP chief financial officer Brian Gilvary said today.

"In terms of the oil price, we have a number of factors: Opec rolling its cuts is one factor, demand is another. By the time we get to 2018, if you see growth in demand of about 1.4mn b/d this year, something similar or even less next year, things will naturally start to come back into balance,"Gilvary said.

"It is an unlikely scenario from where we are today" that oil prices will fall to $40-45/bl, he said in response to a question about the company's financial planning for 2018.

"As you see demand is growing, and actually crude stocks will probably still be at the top end of the historic range by the end of this year. I think something around $50-55/bl seems a reasonable assumption on a point forward basis," Gilvary said.

Benchmark Brent crude futures are trading at just under $52/bl today.

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