Demand for OPEC’s crude will rise as the drop in oil prices below $100 a barrel continues to hinder shale production, Qatar Petroleum International’s Chief Executive Officer Nasser Khalil Al-Jaidah said.
“The coming period will witness an improvement in prices but they will not reach $100,” he said in an interview published Saturday by the official Qatar News Agency. Current prices will hinder the expansion in shale oil, “which signals an improvement in demand for OPEC’s oil.”
The Organization of Petroleum Exporting Countries decided in November not to cut its output target amid a price slump, which resulted from a global supply glut driven by sluggish demand and rising U.S. shale production. The decision roiled markets, contributing to a decline in prices of almost 50 percent last year.
Brent crude closed at $66.81 on Friday, up 43 percent from its lowest settlement for the year on Jan. 13. Oil prices have stabilized since December because of higher demand from Europe and emerging markets, and lower U.S. output, Al-Jaidah said.
OPEC will “stick with” its earlier decision to maintain the output ceiling when it meets next month because of the recovery in prices this year, Abdulmajeed Al-Shatti, a member of Kuwait’s Supreme Petroleum Council, said in an interview on Tuesday.
Qatar Petroleum, the world’s biggest producer of liquefied natural gas, will benefit from lower oil prices as it restructures the company by “shedding added costs that have accumulated in the past,” Al-Jaidah said. Qatar Petroleum International, QP’s foreign investment arm, will be taken over by its parent, which will focus more on foreign operations and investments as most domestic production projects have been completed, he added.