Abu Dhabi oil price falls in October
Abu Dhabi oil price falls in October
Abu Dhabi: The official selling prices (OSP) of Abu Dhabi's crude oil grades averaged $106.65 (Dh391.4) a barrel until October, the first 10 months of 2008, four per cent lower than January-September average of $110.94 a barrel, latest data from the Abu Dhabi National Oil Company (Adnoc) shows.
Adnoc's crude grade prices have been coming down in line with the steadily falling international oil prices due to global recession fears.
Better position
The OSPs of Abu Dhabi crude oil grades - Murban, Upper Zakum, Lower Zakum and Umm Shaif - plunged 42.29 per cent in October from September's average price of $96.90 a barrel.
Energy experts say the UAE, because of Abu Dhabi's relatively lower oil production costs and high cash balance, is in a better position to come to grips with a fast-changing global economic scenario than some of the other countries of the Middle East region.
This year alone, on the back of skyrocketing oil prices in the first seven months of the year, they say, the UAE's oil export revenue is expected to exceed $100 billion, which would ensure smooth cash flows for ongoing and newly announced projects for several months at a stretch.
"The UAE's break-even point for oil could be anywhere between $30 and $45 per barrel," Kate Dourian, the Middle East editor of information provider Platts, told Gulf News.
However, economists warn that international oil prices remaining below $50 per barrel longer term, will have a negative impact on the UAE's oil export revenue and in turn, that will affect investments in the country's oil and non-oil sectors.
Mohammad Amerah, an Abu Dhabi-based econo-mist, said should that happen, the UAE government, if it wants to maintain its previous level of investments in ongoing projects, will have to draw upon its accumulated cash reserves and new oil projects.
International prices
International prices have plunged more than $100 a barrel after soaring to an all-time high of $147.27 a barrel on July 11.
The oil prices have gone into a freefall, led by the turmoil in US financial markets and its subprime mortgage crisis.
Fuel consumption in the US, the world's largest oil importer has slowed down considerably over the last two quarters. As well, the oil demand has reduced in Europe and Japan, as governments continue to grapple with their slowing economies.
