LONDON: The CEO of Abu Dhabi National Oil Company (ADNOC) expects to see a robust recovery in oil demand driven by consumption in China.
But the industry will need to remain cautious and focused on its cost base amid continued volatility, said ADNOC CEO Sultan Al-Jaber in an interview with IHS Markit Vice Chairman Daniel Yergin.
"No one is in a position to predict what the shape of economic recovery will look like in the long term. There are multiple macroeconomic variables but on the positive side, the market has clearly tightened in the last two months, and this happened because economies began to reopen," he said. "The approach of OPEC and its leadership also helped build confidence in the market and as a result we are seeing the robust return of oil demand and this is mainly coming from China."
China has ramped up oil purchased in recent months with its imports for May, June and July together representing the highest three months on record.
The positive outlook for oil was echoed in the results of Australian mining and oil production group BHP on Tuesday.
"We believe that the most significant risks to the physical (oil) market have now passed," the company said.
Oil producers within OPEC and others outside the group including Russia have agreed to slash production in an effort to stabilize the market as global oil demand was devastated by the collapse of demand associated with pandemic lockdowns.
The group, known as OPEC+, eased their cuts this month to about 7.7 million barrels per day (bpd) from 9.7 million bpd previously.