It will take time for oil markets to rebalance, Total's boss says
- Pouyanne noted that although the market was slowly balancing, investor sentiment was still volatile
- He reiterated that Total was targeting 5 percent oil production growth per year until 2022
Oil markets are rebalancing but the process will take time, the chairman and chief executive of oil giant Total told a London conference Wednesday.
"When you have three of four years of oversupply it takes time to rebalance the market," Patrick Pouyanne said.
Speaking at an oil conference in the U.K. capital, Pouyanne noted that although the market was slowly balancing, investor sentiment was still volatile.
"Markets are volatile but mindsets are also volatile," he said, adding that "time is important" for markets to rebalance, although he forecast "very strong demand" in the near future.
Pouyanne's comments come amid renewed hopes that oil markets are making good progress in terms of rebalancing following several years of challenging supply and demand dynamics for oil markets, national oil producers and major oil companies.
French oil and gas giant Total has been no exception, with profits hit during the worst of the oil price slump prompting the company to implement a cost-cutting drive.
However, Pouyanne reiterated that the company was targeting 5 percent oil production growth per year until 2022. But he also said the firm's mission was the delivery of "reliable, affordable and clean energy" to its customers.
Oil prices have been bolstered by a decision by 24 OPEC and non-OPEC countries, including major producer Russia, to cut oil output by 1.8 million barrels a day in a bid to support and stabilize oil prices.
The OPEC/non-OPEC deal was implemented in January and has helped to stabilize prices, though they have struggled to break through the $60 a barrel mark and remain far off a peak price of $114 a barrel seen in June 2014. It is expected that the oil producers could extend the deal beyond the current deadline of March 2018.
Pouyanne said the visit of King Salman of Saudi Arabia to Moscow earlier this month had "cemented" the relationship between Russia and Saudi Arabia and that both sides seemed committed to higher oil prices. "I'm convinced they're targeting oil prices above $60 a barrel," he said.
Saudi Arabia Energy Minister Khalid Al-Falih told CNBC in early October that he was confident that markets would continue to rebalance and that demand was healthy.