Oil prices are not expected to rise next year, the head of French energy giant Total said in Qatar.
"We don’t anticipate a recovery in 2016,” Total CEO Patrick Pouyanne said on the sidelines of the International Petroleum Technology Conference in Doha, Arab News reported.
“Having said that, I don’t know if the price will be at $40, $45, $50, $60” per barrel, he added. “In 2016 the growth of capacity will still be larger than the growth of demand. I am not very optimistic for 2016, beyond that it is difficult to know."
Oil prices have nosedived by more than 60% in the last 18 months, with the world’s largest oil producing nations defying calls to reduce output.
Oil prices fell to their lowest in nearly seven years on Monday after OPEC’s meeting ended in disagreement over production cuts and without a reference to its output ceiling. However, Pouyanne said Total had budgeted to meet the continued lower oil prices and ruled out any job losses in the near future.
“My job is to be sure that we can make profits whatever the price is. The good answer which we are working on in Total is to lower the break-even,” he said, adding that the objective is to break even at $60 per barrel in 2017.
Pouyanne said he was not surprised by OPEC’s decision last week against slashing high output levels. He added that he expected “non-OPEC supply” to contract next year.
“Non-OPEC supply will contract because US supply will contract from the middle of next year. From mid-2016, we should begin to see a contraction of US production,” he said.
Pouyanne is one of several big names from the oil industry attending the conference, including the CEO of Shell, Ben Van Beurden and Amin Nasser, the president and CEO of Saudi Aramco.
