Rising petroleum demand in China, North America and Europe will help bring global oil markets into balance this year, BP Plc Chief Executive Officer Bob Dudley said.
“Global supply and demand recently have moved toward a better balance, and we expect this trend to continue into the second half of 2016 and probably reaching a balance by the end of the year on a daily basis,” Dudley said in a speech to the Economic Club of Washington, D.C. As stockpiles are drawn down, oil prices will probably reach $50 per barrel by the end of the year and $50 to $60 next year, Dudley added.
Crude prices in New York have rebounded by about 90 percent since hitting a 12-year low in February, hovering around $50 a barrel, as U.S. output has declined and disruptions in Nigeria and Canada pared supplies. It’s still worth less than half its peak price in mid-2014 though, which has forced BP and other producers to slash spending and defer new projects. That approach should continue even as BP works to replenish naturally declining reserves.