OPEC sees crude price recovery in 2016

© Essam Al-Sudani
The oil market will be more balanced next year as production contracts and global demand increases, according to the head of the Organization of the Petroleum Exporting Countries (OPEC) Abdalla Salem el-Badri.

“At OPEC, we are hopeful that the industry will see a more balanced oil market in 2016,” El-Badri said at a conference in Kuwait City on Sunday, adding: “We have recently seen a contraction in production from some non-OPEC producers and an uptick in demand growth.”

El-Badri said he expects global demand for oil to rise to 110 million barrels per day by 2040 from the current 93 million barrels per day, and that investors can be optimistic about the oil industry's future in the coming months.

"We need to keep investing, it is essential for our industry," said el-Badri. "I remain confident that our industry's best days are yet to come."

Qatar’s Energy Minister Mohammed Al Sada echoed the OPEC chief’s optimism, saying oil prices have bottomed out and there are signs of recovery in 2016. OPEC member Qatar is one of the largest oil producers in the world, with an output of 2.3 million barrels a day.

OPEC’s output in July hit a three-year high when the 12-member countries pumped 31.5 million barrels per day (bpd). The cartel’s chief then said  that oil prices will not drop lower, as demand was surging and production falling. He stressed that the cartel was not going to cut crude output.

Last month OPEC signaled of a possible change of stance. The cartel said it might cut output and stands ready to talk to other producers. But this is only possible with a change of policy by its largest producer Saudi Arabia.

READ MORE: Oil slumps into tailspin as OPEC leaves output unchanged

In June, despite falling prices, the cartel decided to keep the output quota unchanged at 30 million barrels, sending oil prices below $50 a barrel.

Brent futures for November were up 27 cents on Monday, trading at $52.92 per barrel. Price for West Texas Intermediate grew by 25 cents, $49.88 per barrel at 1:12pm GMT.