The United Arab Emirates’ energy minister said on Monday that he expected an upward correction of oil prices next year.
“We are expecting an upward correction – 2016 will be a year of correction, to what level we will see,” Suhail bin Mohammed al-Mazroui told reporters on the sidelines of an international business conference in Abu Dhabi.
He stressed that the UAE would not try to impose a correction on the market, but that market fundamentals – including a faster-than-expected recovery in demand – were indicating there would be one.
“As far as OPEC is concerned and what we agreed, we are going to move to a market-driven price so supply and demand will dictate what is the right price for producers,” he said.
“We are not going to interfere with that mechanism. If you think about it, today the slowdown in certain types of production tells us the current prices are not the right prices for the long term – we need some more corrections upward for the prices.”
He added, “Whether it is 80 or 70 (dollars per barrel), the market will determine that as we have production coming from different sources.”
Asked about the possibility of Iranian oil production increasing after international sanctions on Tehran are removed, Mazroui said: “Iran is a member of OPEC and we think that every country has freedom with its production, but we hope that as an OPEC group we remain all on the same line of thinking and take group decisions, and we hope that members remain committed to the production ceiling of OPEC as that will support the balance of prices.”