"There are signals from our consuming markets that our industry should prepare for slower GDP growth. And hence it will translate into tougher days," Rainer Seele told Reuters on the sidelines of the World Energy Congress in Abu Dhabi.
Brent oil prices have been trading at around $60 per barrel in recent weeks, down from their 2019 peaks of $75 per barrel, as slower economic growth outweighed lower oil supplies from sanctions-hit Iran and Venezuela. [O/R]
Seele said he expected growth in global oil demand to fall below 1 million barrels per day this year - for the first time in many years. "And it will continue in 2020," he said.
Softer prices will help rebalance the market as they would prompt higher cost producers, including shale firms in the United States, to adjust their plans: "I see some predictions that U.S. oil production growth may halve soon," he said.
Meanwhile, energy asset prices will also come down.
"The industry might need to prepare for consolidation. The M&A market might return to a more healthy mode as assets become more reasonably priced," said Seele, adding that OMV was for now taking a break on the M&A front.
(Reporting by Dmitry Zhdannikov; Editing by Susan Fenton)
By Dmitry Zhdannikov