Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said.
"The global economy is going through an unstable period. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for declining recovery rates," Naimi was quoted as saying by Bloomberg.
The recovery rate for all the world’s oilfields is decreasing by about 4 million barrels a day. Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” he said at a conference in Manama, Bahrain.
The oil minister said Saudis need billions of dollars to continue exploration, produce oil and invest in spare capacity to stabilize the market.
Threatened by surging output mainly from North America and Russia, the Organization of Petroleum Exporting Countries has been pumping above its target for 17 months as it seeks to take market share from higher-cost producers.
Oil has tumbled since the middle of last year as US stockpiles and production expanded, contributing with OPEC to global oversupply.
"The oil market will start to rebalance next year and prices will improve," Matar al-Neyadi, energy undersecretary for the UAE, said at the conference.
"For every increase of $5 in price per barrel, global oil supply will expand by about 300,000 barrels a day," Seth Kleinman, London-based head of energy strategy at Citigroup Inc., said at the same event.
"Shale oil production will be roughly flat in 2016 if prices are at around $50 and global demand next year will be disappointing."
Even so, Kleinman does not foresee a big drop in shale output.
“I am not negative forever on oil,” he said. “Things will be better in the long term.”
"Current US shale output is slightly less than 5 million barrels a day and will drop by 900,000 barrels daily in 2016," Paul Horsnell, head of commodities research at Standard Chartered Plc, said at the Bahrain conference.
"Total US oil production will not recover to its recent peak until at least 2018."
