DALLAS (Reuters) - Robert Kaplan, the new chief of the Dallas Federal Reserve Bank, said on Thursday he expects it will be early or mid-2017 before the supply of and demand for oil come into balance, with oil prices likely to be higher in a couple of years.
“The energy situation may get a little worse before it gets better,” Kaplan told the Real Estate Council in Dallas, referring to the negative impact that low oil prices have had on the Texas economy.
As demand for oil rises this year, he forecast, oversupply will drop but still be at about 300,000 barrels a day by the end of this year. A large global oil oversupply, in part from new exports from Iran, has driven oil prices down.
Kaplan won’t vote on policy until 2017, but he will take part in the Fed’s policy meetings over the year, with the next one set for mid-March.
Reporting by Ann Saphir