NEW YORK (Reuters) - The oil market is rebalancing in the short term, and demand will continue to grow in the long term, Saudi Aramco Chief Executive Amin Nasser said at the Columbia University Energy Summit on Friday.
In the short term, the oil market has a surplus, but Nasser said that supplies are falling behind what will be required in coming years.
"The future market situation will be increasingly on firmer grounds, though volatility could continue until the rebalancing takes firmer hold and inventory withdrawals assume a more consistent trend," he said.
In both 2018 and 2019, Aramco expects demand to continue to grow, and Nasser said he expects the growth will continue into the years ahead.
"I believe that peak demand is not in sight," he said, when asked whether the market was approaching peak demand.
Nasser expects demand for hydrocarbons to increase with many more traditional fuel vehicles than electric cars to be added in coming years even as more efficient engines emerge and renewables are used for some light transportation.
Oil prices have begun to emerge from a two-year rout as the Organization of the Petroleum Exporting Countries has cut production this year, following an agreement in November aimed at reducing an overhang of stockpiles. Still, concerns about U.S. production overhang the market. [O/R]
Nasser said the count of rigs operating in U.S. shale formations and bounces in inventory figures have depressed the market.
Aramco approves investment projects based on a long-term view, spanning decades, and sees demand growth continuing to support expanded refining and marketing in the United States, Asia and other markets. Asia already accounts for 60 to 70 percent of Aramco's exports and is seen as continuing to be a growth market, he said.
The company is also increasing its gas production and expects to double it to about 23 billion standard cubic feet daily over the coming decade.
Aramco is gearing up for a share listing next year, aiming to get a valuation of up to $2 trillion in what could be the world's biggest initial public offering.
Nasser said that offering is "on track."
Reporting by Jessica Resnick-Ault and Julia Simon; Editing by Chizu Nomiyama and Cynthia Osterman