OPEC official: Oil to rebound further this year

Oil prices could continue to rebound in the second half of 2015 following signs of growth in demand and a drop in high-cost production, an OPEC official said Monday.

"It is expected that a kind of a balance will exist in the oil market in the second half of 2015 which will support prices," Kuwait's governor at OPEC Nawal al-Fuzai told reporters.

"Prices are improving, growth in supplies from outside OPEC -- especially shale oil -- is lower than before and demand is recovering," she said.

This has pushed both the Organisation of Petroleum Exporting Countries and the International Energy Agency to adjust upward their forecasts for crude demand, Fuzai said.

She said it was too early to predict any decision by OPEC at its meeting next month.

The 12-member cartel decided in November not to cut output, a decision that saw crude prices dive 60 percent before starting to rebound.

Over the past few weeks, oil prices have climbed about 40 percent but remain well below their levels of more than $100 a barrel in June last year.

The aim of OPEC's decision was to curtail the fast-growing shale oil sector in the United States.

Fuzai said that she does not see oil prices dropping this year barring any major events, such as a sudden and unexpected slide in demand.

But she warned that an expected deal between Iran, a member of OPEC, and Western powers over the Islamic republic's nuclear programme could heap added pressure on oil prices even though Tehran is not likely to resume exports soon.

Fuzai said that surplus supplies of crude oil on the market dropped from around 2 million barrels per day late last year to between 1-1.2 million now.

She added that a meeting of technical experts from OPEC and non-OPEC conventional producers was held this month but no decision was taken.

Oil prices rose in Asia Monday as fresh tensions in Yemen and Iraq raised concerns about a supply disruption in the crude-rich Middle East.

US benchmark West Texas Intermediate for June delivery gained 21 cents to $59.90 while Brent crude for July rose 18 cents to $66.99 in afternoon trade.

Analysts say however that any gains in oil prices are being capped by continued concerns over a global oversupply in the face of weaker demand.