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Oil bosses upbeat on market rebound

LONDON: Movers and shakers from the oil industry descended on London last week and expressed optimism over a sharp rebound in the beleaguered crude market later this year.

Bob Dudley, chief executive of British energy major BP, forecast at the International Petroleum Week industry conference on Wednesday that “the daily (oil) supply and demand” will be balanced in the second half.

“Every storage tank and swimming pool will be full of oil,” Dudley told delegates, acknowledging the vast global supply glut that sent prices plunging close to 13-year lows under $27 (24 euros) per barrel last week.

“And then… the market starts to pull the plug.

“And I think we will begin to see the fundamentals (of supply and demand) take over,” he said, indicating prices would pull higher in the third or fourth quarter.

Dudley cautioned however that $100 oil would not return any time soon.

World oil prices meanwhile rose Friday, with US crude rebounding from a 2003 low to reach almost $30 per barrel, on reports OPEC was willing to organise output cuts that could curb global oversupply.

However, prices have nevertheless slumped by about 70 percent since mid-2014 with the market awash with crude.

Patrick Pouyanne, chief executive of French oil and gas giant Total, agreed that prices would charge higher towards the end of the year.

“I think that the price will be higher at the end of the year 2016 than it is today,” Pouyanne said Thursday at the IP Week conference.

The recent slump in the cost of oil has slashed the profits of energy companies, prompting them to cut or defer investment and axe thousands of jobs.

Total also revealed it would invest up to $2 billion less in 2016 than originally planned, as it grapples with ultra-low prices.

“It’s quite a crisis that this industry is facing,” added Pouyanne.

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