By BLOOMBERG

DAVOS • The oil market is gradually returning to balance as OPEC reins in output and the US shale boom slows, according to executives gathered at Davos. Yet, the risk of stalling growth in China continues to cloud the outlook.

“The supply and demand looks balanced for 2019,” BP plc CEO Bob Dudley said in an interview in the Swiss resort. “OPEC has started to cut production in the first quarter, but they cannot balance overnight.”

Crude has got off to its best start to a year since 2001 on hopes that the OPEC and its allies will cut enough output to eliminate a glut. However, forecasts for slower economic growth — particularly in China — are threatening that rally, with demand concerns overshadowing tighter supply.

“There’s still so much uncertainty about what’s going to happen with the world economy,” Occidental Petroleum Corp CEO Vicki Hollub said in a Davos panel discussion. “The volatility, I think, is going to be worse over the next couple of months”, before Brent crude settles in a US$60 to US$70 (RM289.80)-a-barrel range, she said.

Benchmark Brent has rallied about 13% this year as the OPEC cuts kick in, but remains almost 30% below the four-year peak reached in October. Crude’s volatility has unnerved the investment community, which is “much more cautious now” than it was previously, according to Hollub.

Hess Corp CEO John Hess said investors want shale producers to “grow at a more moderate rate, so that you’re free-cash-flow-generative in a low-price environment”.