Saudi Oil Head Predicts Oil Supply in 2016 Will Shrink, But Not to China

At the end of 2016 oil prices will be higher than they currently are but they still won't reach the level they were in 2013 and 2014, the director of Saudi Aramco said.

Oil prices will have risen by the end of the year but they won't return to $100 a barrel, Amin H. Nasser, president and chief executive officer of Saudi Arabian Oil Company said at an event in Beijing on Monday.

According to data from Marketwatch on Tuesday Brent crude oil was trading at $42.18 a barrel for June deliveries.

"The gap between supply and demand in the oil market is shrinking," Nasser told the China Development Forum 2016.

Nasser also said that Saudi Aramco is seeking greater collaboration with China, including participation in China's "Belt and Road" initiative, which is seeking to enhance the connectivity of the Asian, European and African continents and their adjacent seas.  

"At Saudi Aramco, we believe the Belt and Road holds great potential to bridge East and West Asia," Nasser said, adding that the company wants to deepen its involvement in China's downstream sector through investments in integrated supply, refining and distribution.

"While technology continues to revolutionize energy, it will be decades before renewable energies contribute appreciably. Clearly, ultra-clean oil must be our priority."

The director of Aramco also expressed a similar prediction about the future of the market in December, when he told an energy conference in Qatar's capital Doha that there will be less "non-conventional" oil supplies this year.

"This year you see a decline, there is no additional unconventional oil coming to the market, actually there is a decline," Nasser said.

"The supply and demand imbalance in the market will adjust and stabilize and the gap will be closing, and we will be seeing, hopefully, an adjustment in the prices going forward starting from 2016," he said.