Abu Dhabi: UAE and Oman energy ministers expect oil prices to remain healthy on the back of global economic growth and demand.
The ministers were speaking during the Atlantic Council Global Energy Forum in Abu Dhabi on Friday.
“Many fundamental are working in the right direction and I am optimistic about 2018. We had healthy growth in 2017 and why not in 2018? There is good demand and global oil inventories are declining,” said Suhail Al Mazroui, UAE energy minister.
Oil prices have been rising in the last few months due to production cuts by Opec and non-Opec member countries as well as due to higher demand and geopolitical tensions in the Middle East.
Brent, the global benchmark is currently trading at about $69 (Dh253) per barrel after hitting a three year high of $70 per barrel on Thursday.
Elaborating further on oil prices, Al Mazroui said they will take into consideration average oil prices but not the daily oil prices that keep fluctuating.
“When we look at the end of 2017, we were $65 or $66 per barrel, but the average price was $55 or $54 per barrel for the whole year. We don’t look at the price in a day, and say we are at a point that we need to do changes.”
“We are in winter and we need to see in the second quarter and we see softening of the market. If the oil price is $70 per barrel today, it doesn’t mean it is going to be same for the whole year.”
When asked whether they are considering changing the deal due to current rise in oil prices, he said the deal is for the full year and there is no rush to change it.
Echoing similar views, Oman oil minister Mohammad Bin Hamad Al Rumhi said the price is going to stay healthy in the coming weeks.
“I think the price is going to stay healthy in the range of $65 to $70 per barrel at least for few weeks unless something happens in the world like the movement of the US dollar or the geopolitical upheaval.”
Oman which is part of the Opec agreement is cutting 45,000 barrels per day in production, he said.
Opec secretary general Mohammad Barkindo said there was “no panic” about rising oil prices without elaborating further.
Meanwhile, a top executive of International Energy Agency (IEA) expects more shale oil production from the United States due to rise in oil prices.
“The higher price will encourage more production growth in the US and this will put downward pressure on oil prices,” said Fatih Barol, executive director of IEA.