OREANDA-NEWS. Saudi Arabia expects a drawdown of OECD commercial stocks to begin in the second half of this year, said Ibrahim al-Muhanna, adviser to the oil minister.

Global oil demand growth this year is forecast at 1.2mn b/d, rising to 1.5mn b/d in 2017, he said, while total supply is expected to fall by 1mn b/d in the second half of this year.

Earlier, Opec secretary-general Abdullah al-Badri said he expects the market to move back into balance in the third quarter of this year, adding that it is "essential" that Opec and non-Opec producers find ways of addressing an overhang that has left OECD commercial stocks some 350mn bl above the five-year average.

Al-Muhanna referred to the 17 April producer country talks in Doha that ended in failure when the Saudi Arabia delegation said it would not sign the pre-written draft deal on freezing output unless Iran also signed. He said, "we were initially hopeful of an agreement" but differences could not be overcome. He added: "The door for co-operation remains open, and the issue [of a freeze] will be discussed at the next Opec meeting."

The next Opec meeting is scheduled for 2 June. Non-Opec Russia's oil minister, who was involved in convening the 18 country meeting in Doha, yesterday cast doubt on the value of a freeze later in the year, saying: "If a number of months pass, in principle, in my opinion, the need for such a freeze will disappear... In February, it was relevant, in April it was less relevant. I do not exclude that by June it will be irrelevant."

Al-Muhanna said energy efficiency measures in Saudi Arabia will allow a reduction in forecast 2030 demand of 2mn b/d.

Turning to plans to privatise part of state-owned Aramco, al-Muhanna confirmed that the plan is to sell off 5pc of the entire company, not just subsidiaries. Studies are being conducted on how to achieve this and could take up to one year to complete, he said. He said that his own opinion is that the listing would be too big for the Saudi stock exchange and is more likely to be in New York.