Kuwait oil minister says he expects price rally to continue

Ali Al Omair also said the current market surplus was less than 1.8 million barrels per day.

Kuwait’s oil minister said yesterday he expected the current oil price rally to continue into the second half of this year as the global supply surplus shrinks.

“I think it will last,” Ali Al Omair said of the recent rise in oil prices.

“It will start holding gains now and hopefully in the second half of 2015 we will see better prices.”

Mr Al Omair also said the current oil surplus was “definitely lower” than 1.8 million barrels per day.

“The surplus is now reducing and some of the production is getting out of the market,” he said.

Oil prices steadied yesterday, with benchmark Brent trading up 3 cents to US$61.55 per barrel in early trading.

That follows strong gains last week when oil rose after another drop in the US rig count, pushing Brent back above $60 a barrel for the first time since December.

Despite the price rises, many traders and analysts say little has changed fundamentally to explain the price rebound of the past two weeks. They believe there is a global oversupply of nearly 2 million bpd of crude oil.

Saudi Arabia’s oil minister, Ali Al Naimi, discussed a “relative improvement in the market in terms of an increase in demand and the stability of prices in the current period” with Algeria’s justice minister, the official Saudi news agency SPA reported last week.

Opec forecast demand for its oil this year would be much higher than previously thought.

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