UAE oil production hits 2.2m bpd

Abu Dhabi: The UAE is currently producing around 2.2 million barrels of oil per day (bpd) in line with the output target set by the Organisation of Petroleum Exporting Countries (Opec), Mohammad Bin Dha'en Al Hameli, Minister of Energy, said here yesterday.

The UAE's current oil production capacity was 2.8 million bpd, Al Hameli told reporters on the sidelines of OPEC50 UAE Energy Forum. Commenting on high oil prices, which have shot above $100 a barrel, Al Hameli said: "Oil prices react to events and they have reacted to events in Egypt.

High stocks

"The market is well supplied. The price can't be explained by current fundamentals. The stocks are high," he added. Al Hameli also said there are signs of "a gradual increase in demand".

Political unrest and public uprising in Egypt which eventually led to Hosni Mubarak stepping down as president sent oil prices skyrocketing. It is widely believed that speculators are driving the oil prices higher rather than the fundamentals of supply and demand.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $85.70 a barrel at 0649 GMT, up $0.12 in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose $0.73 to $101.67 a barrel.

Speaking at the energy forum, Al Hameli said it is important to understand the role of Opec in the oil market. "Some people believe that the main aim of the organisation is to fix prices. Today, this is not the case. Instead, ministers focus on coordinating production to ensure that the right amount of oil reaches consumers. It is a myth that Opec just wants to reduce production in order to raise prices," he added.