UAE Energy Minister Considers Current Oil Prices Adequate

UAE Energy Minister Dhaen Al Hamli considers the current per barrel oil price of $105 to $110 as “good” in view of the situations of several of the regional and foreign nations that produce oil.

Fresh discoveries in the U.S. and changing stockpiles have direct, short-term impact on the current oil prices, not for the long term. Al Hamli was quoted as saying that he expects prices this year to be the same as last year.

Recently, the price of oil has been increasing slowly, supported by the fiscal deal in the U.S. and reports that the economy of China is picking up little by little.

But worries regarding demand will go on this year, according to Al Hamli.

The world is still suffering from the crisis in the economy which has been happening for almost five years now. As such, the energy minister expects energy demand to relatively fall below its level last year.

Al Hamli added that there may be some demand stability that may bring prices to a similar level as last year because of several factors outside market fundamentals, like problems in crude producing nations. This, according to the energy minister, has a direct effect on the price of energy.

OPEC’s average oil production in December was 30.62 million barrels daily, a drop to its lowest level in over a year, according to a poll conducted by Reuters.

The survey showed that the exports of Iran declined due to crippling sanctions imposed on them. Moreover, Saudi Arabia cut its output in November and December last year as a response to a drop in demand. Finally, Iraq had the largest supply drop, due to technical and political problems.