DUBAI: Oil prices have been recovering but are still weak, the head of Gulf giant Saudi Aramco said on Monday, warning that market volatility could persist in the near future.
"While the oil market has recovered from its most severe period, it's still weak," Aramco chief executive officer Amin Nasser said at an energy conference in Dubai.
He said global supply has begun to fall, "especially US shale oil", due to the cancellation or deferring of investments in new oil and gas capacity.
"Despite volatility, the market is heading toward rebalance, and prices are likely to strengthen with time," Nasser said.
"However, market volatility could remain with us for the near future," he added.
Oil prices rose modestly on Monday ahead of a meeting of producers from the Organization of the Petroleum Exporting Countries cartel and Russia in Algeria this week that could agree to cap supplies.
At about 0740 GMT US benchmark West Texas Intermediate for November delivery was up 29 cents at $44.77 while Brent crude gained 23 cents to $46.12.
Despite the positivity, fears remain that an agreement cannot be reached in Algiers. Previous attempts to do so in April were scuppered by Iran, which had just emerged from years of Western-imposed nuclear-linked sanctions.
Oil prices have been hammered by a stubborn supply glut since late 2014 that has seen supply far outweigh demand, resulting in 13-year lows earlier this year.
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