Oil demand in 2016 will stay strong, supporting prices, but the market is unlikely to rebalance by the year end, the chief executive of French oil and gas major Total said on Wednesday.

Patrick Pouyanne told a French Senate committee that oil demand rose sharply in 2015 to 1.8 million barrels per day (bpd), increasing at about 2 percent in a single year.

“This year, experts see demand at about 1.2 million barrels per day,” Pouyanne said.

“Me and my team see it at about 1.4 million barrels per day, which is still strong and means the market is rebalancing, but will not rebalance completely by the end of the year, however, it will somehow support prices,” he added.

Oil futures have rebounded in the past days, hitting 2016 highs of nearly $50 per barrel due to supply disruptions in Nigeria and Canada, from as low as $26 per barrel in January on a global supply glut.

The Paris-based International Energy Agency, said in its May forecast that global oil demand growth was broadly unchanged at 1.2 million bpd for this year, but said the risks to future forecasts lay to the upside.

Pouyanne said the market was still being supplied and major projects that were decided by oil companies some three to four years ago when prices were high at about $100 per barrel, are expected to enter into production around the year 2020.

“However, investments have fallen sharply and we are not preparing production for the years 2019-2020,” he said, adding that investments have fallen from about $700 billion in 2014 to $400 billion this year.

“At this rhythm, there could be a shortfall of supply and a counter shock. There could be a shortfall of about 5 million barrels in that horizon, which is a lot. All of this because volatility has been extreme,” Pouyanne said. - Reuters