Saudi Aramco president and CEO Amin Nasser told the Global Competitiveness Forum in Riyadh on 25 January that low oil prices, which are stimulating demand and knocking out high-cost production, will lead to higher prices at the end of this year.

“Our prediction is that we shall see some adjustment, but this will happen at the end of this year,” Nasser said.

The CEO said world oil demand grew by 1.5 million-1.8 million barrels a day (b/d) in 2015, compared with the previous trend of about 900,000 b/d. He added that Aramco had forecast world demand would grow by 1.2 million b/d in 2016, but that was before the latest price slump.

“With lower prices, demand will increase beyond 1.2 million b/d. The gap between supply and demand will start closing,” he said.

“At $30 or lower, marginal barrels will leave the market, it is not sustainable [for] barrels to continue. With higher demand, [and] marginal barrels going out, what we are expecting [is an] adjustment in prices [that] will start at the end of 2016. The price will be adjusted, but not to what we have seen in 2013 and 2014. It will be better than we are seeing today.”

Nasser echoed comments made by Aramco chairman Khalid al-Falih on 25 January, in which he said Saudi Arabia was continuing to invest in the oil industry and that $30 a barrel oil was “irrational”.