- "On a daily basis the market is balanced, it's just the inventory levels in the world that are so high"
- Brent was up by 1.5 percent being sold at $48.27 and WTI jumped 1.7 percent being sold at $45.83 on Wednesday morning
Despite recent volatility in the price of oil, the CEO of BP believes the market is currently balanced and production is meeting demand on a daily basis.
"I think everyone uses the word balanced and they forget that it means different things to different people. To me, it means on a daily basis production and demand is equal. So on a daily basis, the market is balanced, it's just the inventory levels in the world that are so high," Bob Dudley, chief executive officer of BP told CNBC on Wednesday.
Oil prices were higher on Wednesday after a drop in U.S. fuel inventories and a cut in the U.S. government's forecast for output in 2018. The commodity moved lower on Tuesday after reports that Saudi Arabia had produced above its output gap. In June, oil reached a 7-month low on a bearish U.S. inventory report.
The current flow of data has led to an ongoing volatility. According to Dudley, markets need to stop taking into account data on a weekly basis.
"You can't do it weekly, which is what the market is doing, particularly focusing on the U.S. inventory levels," he added.
BP's Dudley told CNBC that the company will plan for an average of $50 a barrel in the next five years, but as it puts its books in order, it will only need a crude price of $30 a barrel to cover spending and dividends.
"For us, we're going to plan around ($)50 for five years, get the discipline and the capital discipline in place, get our costs down and we will get our break-evens well into the 30s," he said.
BP is trying to raise output and keeping capital spending at no more than $17 billion to shore up its position after the 2010 oil spill in the Gulf of Mexico.
BP shares were up by 1.9 percent on Wednesday morning.
An OPEC-led deal to freeze output and to boost market prices has also been affecting oil moves recently.
Kazakhstan, for example, has said it wants a gradual exit from the OPEC's output cap deal. The country, just like Russia and other OPEC members, pledged to reduce output until March of next year. Moscow has also indicated that it is ready to assess new proposals to revise the OPEC deal if needed.
Such comments cast doubts over the stability of the deal.
"I think it's way too early," Dudley said about the continuity of a freeze in output. "We won't actually know until March of next year," he said.
OPEC ministers will be meeting in Vienna on July 24th.