Higher oil prices may boost shale oil production but the global oil market can accommodate this as demand remains healthy, Qatar’s energy minister said on Wednesday.
“The market is gradually accommodating for shale oil as well as shale gas – the demand is healthy. With that continuous demand increase I think all available oils are going to be accommodated,” Mohammed Al Sada told Reuters in Doha.
He said current oil prices made the development of most oilfields around the world unviable.
OPEC and non-OPEC producers agreed late last year to cut crude production by a total of 1.8 million barrels per day to help reduce a supply glut that had depressed prices.
Sada said it was too early to say whether it would be necessary to extend the pact beyond June, but a drop in inventories had started – a key indicator OPEC is monitoring to decide whether the deal is enough to balance the market.
“All indications show we are heading in the right direction and the drop in supply started in a very concrete way. That will give us a sort of comfort that the gradual drop (in inventories) towards the five year average will be clearer down the road,” he said.