Dubai: Improving economies in Europe and elsewhere together with a continued decline in output of shale oil point to a recovery in demand for crude and an increase in prices next year, according to UAE Energy Minister Suhail Al Mazroui.
“I’m optimistic that we will see an upward correction in 2016,” he said on Tuesday addressing reporters in Abu Dhabi. “What’s the percentage of correction? I can’t say it’s going to be a high percentage, but there will be an improvement on 2015.”
Al Mazroui didn’t specify countries showing stronger growth, and he acknowledged that shale oil “is needed and has a role to play”. The market will determine how shale will contribute to future supply, he said.
The UAE, Opec’s third-largest producer, has raised output this year amid a global glut, data compiled by Bloomberg show. The Organisation of Petroleum Exporting Countries bloc is competing for market share against high-cost suppliers, including some US producers of shale oil. Brent crude, a global benchmark, has dropped 42 per cent in the last 12 months and was trading at $49.14 a barrel at 11:13 am on the London-based ICE Futures Europe exchange.
State-run Abu Dhabi National Oil Co. (Adnoc) will continue to invest in energy projects it has already awarded, even amid cheaper crude, Al Mazroui said. “We have a long term view of the market. We know that prices fluctuate and will not stay as is.” Abu Dhabi is the U.A.E.’s largest emirate and holds most of the nation’s oil reserves.
