UAE says $70 oil price is good

The UAE said on Wednesday an average oil price of around $70 is good for both consumers and producers but stressed prices are controlled by market forces.

Minister of Energy Mohammed bin Dhaen Al Hameli said he was satisfied with the current level of prices, which have ranged between $70 and more than $80 a barrel over the previous months following their plunge to about $35 in the aftermath of the 2008 global financial crisis.

“Oil prices are determined by market forces… but if you are asking me if I am happy with the current price level, I would say yes I am,” he told reporters at the Abu Dhabi International Petroleum Exhibition, which is now in its third day.

“We in Opec are satisfied with prices at the moment… I think a price of $70 a barrel is very fair for producers and for consumers as well.”

Hameli refused to answer questions on whether the Organisation of Petroleum Exporting Countries (Opec) would raise output at its next meeting in Ecuador in December. He said he cannot speak for Opec and the meeting is still far away.

Asked whether he thought an oil price of $100 is far, he said he could not comment on that “before oil prices reach that level”.

At its last meeting, Opec maintained its output ceiling despite an improvement in crude prices that are nearly double their level in late 2009.

The 12-nation group decided to slash supplies by nearly 4.2 million barrels per day after crude prices crashed by more than $100 from the July peak of $145 because of a sharp slowdown in demand following the eruption of the crisis.

The UAE and the other Gulf oil heavyweights — Saudi Arabia and Kuwait — have shouldered the brunt of the output cuts as they trimmed production by more than 1.5 million bpd. Saudi Arabia alone cut supplies by nearly one million bpd.

“Prices have been recently hovering between $70 and $82 a barrel and I think they are very reasonable,” Hameli said.

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