Oil prices to rise in 2016: Qatar Energy Minister

Oil prices are expected to climb back up due to a recovery in the global economy and growth in demand

Qatar's Energy Minister Mohammed bin Saleh Al Sada.
Qatar's Energy Minister Mohammed bin Saleh Al Sada.

Qatar’s Energy Minister said on Sunday he saw signs of an oil price rise in 2016 because of a recovery in the global economy and growth in demand.

In a statement released today form the Ministry of Energy and Industry, Mohammed bin Saleh Al Sada said the oil price has "bottomed out" and he sees signs of recovery next year.

The statement said that recent forecasts expect world GDP growth to reach 3.4% in 2016, compared to 3.1% in 2015. This should increase demand for oil by 1.3-1.5 million barrels a day, he said.

Al Sada, who is also the alternate president of OPEC Conference, noted that supply of oil from non-OPEC members has seen on the decline, a trend that he expects to continue in 2016.

On the other hand, demand for oil from OPEC countries will increase to 29.3-30.5 million barrels in 2016, he expects.

Al Sada also highlighted that, as a result of the low oil prices, oil companies decreased their capital spending by about 20% from $540 billion in 2014.

"This trend of reducing investment in the oil industry could result in production shortfalls down the line," he observed.

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