Oil market is re-balancing, but path to ‘next normal’ not a straight line, says energy CEO

CNBC reports that oil markets are re-balancing after a collapse in demand following the coronavirus outbreak but the pathway to "the next normal" is still very uncertain, the CEO of Abu Dhabi's National Oil Company (ADNOC) said.

"There are good signs that the market has tightened in recent weeks and the OPEC++ agreement, voluntary cuts outside of OPEC and the production shut-ins are working together to start to rebalance the market," UAE Minister of State and ADNOC Group CEO Dr Sultan Al Jaber said, alluding to a group of countries that includes OPEC members and other systemically important producers such as Russia.

"As economies begin to open up, demand will follow, but the path to the next normal will not be a straight line," he added. Al Jaber was speaking to Helima Croft, Managing Director and Global Head of Commodity Strategy at RBC Capital Markets.

The coronavirus pandemic has dealt a severe blow to economic activity around the globe and sent oil prices tumbling by over 50% so far this year. While OPEC and its oil-producing allies finalized a historic agreement last month to cut production by 9.7 million barrels per day beginning May 1, some experts reckon that the reduction in supply won't be enough to offset the diminution in demand.