OPEC Producers Bearish On Oil In 2016 As Oversupply Persists
"We are betting on cutting oversupply from high-cost producers," a third OPEC source said. "2017 is more promising to give some support to the market."
"But we need to monitor Iranian exports too. When will they be able to pump more," this source said, adding that he sees prices rising to the range of $50s a barrel by 2017.
OPEC expects global oil demand to grow by 1.25 million bpd in 2016 and non-OPEC supply to decline by about 400,000 bpd as the price collapse hurts rival producers, more than halving the supply glut compared to this year to about 900,000 bpd.
But a rise in Iranian oil supplies could offset this decline as Tehran aims to boost its output by at least 1 million bpd, about one percent of global supply, after sanctions against it are lifted next year, despite scepticism on how much Iran could actually produce and by when.
Two more OPEC delegates are also hopeful of a stronger market after the first half of next year. One said Brent may rise to above $60 a barrel in early 2017, when the market would start to balance.
And the other said he expected prices to remain weak next year with Brent at around $40-$45 a barrel and rising toward the $50s range by the end of 2016.
"I think the market is moving towards reaching the lower end which is probably $35 range and then the market will bounce back slowly but remaining weak ... You can't expect the $35 for long, because fundamentally nothing has changed in the market," this delegate said.
"By the second half of next year it will show the real recovery. Then by 2017 you will have a more stable market," the delegate added. "But this is subject to the Iranian crude, when it will come and by how much."
(Editing by David Evans)
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