(MarketWatch) – The oil price will likely be higher at the end of this year as an increase in demand will reduce the current production over-capacity, Total SA’s Chief Executive Patrick Pouyanné said on Thursday.
Oil demand’s elasticity to price means consumption will rise this year reducing the existing production over-capacity, said Mr. Pouyanné, who estimates over-capacity at around 2 million barrels of oil a day.
Oil companies’ investment cuts will eventually lead to a reduction of oil production, he added.
Mr. Pouyanné said it is impossible to guess the oil price in the short run.
Total, like other global oil companies, has been seriously hurt by an oil price that is roughly 70% below what it was in mid-2014.
The Paris-based company posted a $1.63 billion loss in the fourth quarter of last year.
By Inti Landauro
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