UAE Energy Minister: Current Oil Prices “Good”

Current prices of $105 to $110 are “considered good” in light of the “circumstances” of some of the regional and international oil-producing countries, the UAE Minister of Energy Mohammed Dhaen Al Hamli has said.

“New discoveries in America and the future reserves have direct impact on oil prices, on the short term and not on the long term. I expect prices in 2013 to be similar to prices in 2012,” official news agency WAM quoted Al Hamli as saying.

Oil prices have been slowly rising in recent weeks, buoyed by the US fiscal deal and news that the Chinese economy is gradually picking up pace.

However, Al Hamli said that demand worries will continue to linger in 2013.

“The world continues to suffer from the economic crisis which has been ongoing for five years now. I expect that demand on energy will go down to below the levels of last year, relatively,” said Al Hamli.

“Maybe, there will be some stability in demand and therefore prices will stand at the same level, due to some factors which are beyond market fundamentals, such as the problems in producing countries. This has direct impact on energy prices,” he added.

Oil output from the Organization of the Petroleum Exporting Countries (OPEC) fell in December to its lowest level in more than a year, averaging at 30.62 million barrels per day (bpd), according to a Reuters survey.

The survey found that Iranian exports fell because of crippling sanctions; Saudi Arabia trimmed output in the last two months of 2012 in response to lower demand; and Iraq posted the biggest decline in supply because of technical and political setbacks.