UAE Energy Minister: Future of oil price depends on non-OPEC countries

UAE’s Energy Minister Al Mazrouei said in his interview to the local newspaper that in order to get positive correction the problem of oversupply to the market should be solved.

According to his opinion, the roots of this problem go to the production level of non-OPEC countries.

Depending on the actual production growth from non-OPEC countries this problem could take months or years [to be resolved]. If they act rationally we can see positive corrections during 2015, the UAE’s Energy Minister said.
Current oil oversupply is about 6 million bar /day at the world production level of 30 million bar/day.

The Ministry Head thinks that the current oil prices could encourage world economic growth higher than the expected, which could drive demand upward.

In the UAE, the expansion of production levels is set to continue amid lower oil prices, according to Mr Al Mazrouei, with plans under way to boost capacity to 3.5 million bpd by 2017 from the current 3 million bpd.

“Most of the projects are committed and under construction, and we don’t foresee any delays on the capacity expansion,” the minister said. “But building capacity is something and using it is something else. We will always be wise and considerate of the world supply and demand.”

“The oil and gas industry in the UAE is well developed and as a mature producer, we are not going to change our plans due to price fluctuation,” said the minister. “We have dealt with such fluctuation in the past and we will not panic this time. There is a world demand increase on crude oil and especially our crude, and we believe the market will stabilize itself eventually.”