The global oil market is set to become more balanced in the second half of the year, as production from non-OPEC countries is falling fast, the Organization of the Petroleum Exporting Countries said on Thursday. In the opening address for its bi-annual meeting in Vienna, Qatar's oil minister Mohammed Bin Saleh Al-Sada said 2016 supply forecasts for non-OPEC output has been revised down and the cartel now anticipates a contraction of 740,000 barrels per day this year. That is more than 2 million barrels a day lower than the growth seen in 2015, Al-Sada said. "This trend stems mainly from reduced cashflows, investment cutbacks and the deferral or cancellation of projects," he said. The oil official also raised concern about a 20% drop in global exploration and production spending seen last year, with a further 15% drop forecast for 2016. "This is a major concern for an industry that generally sees investments increasing year on year to sustain production. It is important to keep in mind the link between the marginal cost of production, the oil price and investments," he said. OPEC is meeting in Vienna on Thursday to discuss the oil outlook for 2016. A press conference is expected around 4 p.m. local time, or 10 a.m. Eastern Time. Oil prices were higher as the cartel kicked off the meeting, with Brent up 0.3% at $49.89 a barrel and crude oil 0.4% higher at $49.18.
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