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BP CEO Bob Dudley. Image courtesy of BP/Flickr.

BP CEO Bob Dudley told CNBC Sunday he believes the oil market is “pretty much in balance.”

“It is pretty much there, within half a million barrels one way or the other,” Dudley said.

Dudley added that broader market sentiment may take some time to shift due to historically high oil inventories.

U.S. commercial crude oil inventories fell by 3 million barrels for the week of October 5, according to the U.S. Energy Information Administration.

U.S. crude inventories ended the week at 499.7 million barrels, a historically high level for this time of year.

The International Energy Agency said in its most recent oil market report that oil markets may not re-balance until 2017 due to weakening global economic conditions and lower demand growth.

The agency currently expects global oil demand to grow by 1.3 million barrels per day this year, a 100,000 bpd decline from the agency’s previous forecast.

The IEA said the downgrade is tied to a “more pronounced” third quarter slowdown.

Dudley added that BP is aiming to further trim its cost of production per barrel next year to reduce the company’s exposure to price volatility.

“We said $60 next year; we are under $55 now. We can see our way to $53 next year,” Dudley told CNBC.

Dudley also said that a proposed OPEC production freeze deal has given inventors reason to be more optimistic.

“It is just the fact that people are talking and there is cooperation is very significant.” Dudley said.

OPEC members reached a tentative production deal earlier this month that would call for the group to reduce production by up to 700,000 barrels per day.

Larger producers such as Saudi Arabia will likely shoulder the majority of the cuts while Iran, Nigeria and Libya would be allowed to continue growing production.

OPEC’s next meeting is scheduled for November 30 in Vienna.