OPEC says general oil market outlook is positive as energy industry gathers

OPEC sees the oil market’s outlook as positive in general and the uncertainty that dominated last year is easing, the group’s secretary general said.

“This is a major turnaround from a year ago,” Mohammad Barkindo was quoted as saying on Twitter on Tuesday.

He added that positive global economic developments and resilient demand in Asia were encouraging.

Barkindo spoke ahead of joint technical committee (JTC) meeting for the Organization of the Petroleum Exporting Countries and its allies led by Russia, a group know as OPEC+.

The JTC reviews oil market supply and demand balances as well as compliance of members of the alliance with the agreed cuts.

“It looks good and healthy,” an OPEC delegate said, referring to the latest supply and demand balance for 2021.

“But there are still some thoughts to be cautious,” he added.

Oil company executives at CERAWeek by IHS Markit said that crude demand will rise over the coming decade and that the fossil fuel will remain a crucial part of the energy mix even as renewables draw increasing attention.

Climate change and renewable fuels are taking center stage at this year’s gathering of energy leaders, investors and politicians from around the globe, with oil companies trying to reorient their portfolios after the coronavirus pandemic eroded demand and caused the loss of thousands of jobs.

The industry scaled back investments and cut budgets as prices crashed in 2020, but investments are likely to rebound by next year, said Lorenzo Simonelli, chief executive officer of oil services company Baker Hughes.

“Hydrocarbons are still going to be essential for providing energy to the world,” Simonelli said. “Especially as you look at the near-term future.”

Oil demand may continue to climb over the next decade even as countries work to comply with the Paris climate agreement’s goals for cutting emissions, said Hess Corp. CEO John Hess.

“We don’t think peak oil is around the corner — we see oil demand growing for the next 10 years,” said Hess.

“We’re not investing enough to grow oil and gas in the future,” he said, saying that prices would need to rise to support that investment.