Shell: Oil glut will not clear until the second half of 2017

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The glut in oil supplies that have forced down prices for more than two years will not likely clear until the second half of 2017, says the Chief Energy Adviser at Shell, Wim Thomas, on Monday, according to the Reuters news agency.

Shell’s adviser also marked that several factors would push a rebalancing of the oil market later than it was forecasted by most industry experts. Among such reasons Thomas named the possibility of uncertainty related to oil output in Iraq and Iran.

He explained that while Iraqi government is taking pains to return investors’ interest to the country’s oil sector and increase its crude production next year, Iranian officials have conditionally agreed to cooperate with a potential production freeze by OPEC members. He also added that about 1.5 bpd of African oil from Libya and Nigeria may soon return to the market, which will also influence the price.

Thomas concluded that oil prices may strengthen only if the OPEC countries agree to freeze production.