UAE oil minister says OPEC won’t blink, no sudden rebound of prices

Reuters Updated - January 24, 2018 at 02:11 PM.

A general view of the Dubai skyline shows the Burj Khalifa building in this file photo. Even as Saudi Arabia and its Gulf OPEC allies appear united in their refusal to cut output to boost global oil prices, they are becoming locked in an increasingly fierce battle to secure market share in Asia. The United Arab Emirates (UAE) last week joined Kuwait and Iraq in pricing crude they sell to Asia below that of OPEC's top producer Saudi Arabia. Photo: Reuters

OPEC won't change its oil production strategy and any sudden rebound of prices is unlikely, United Arab Emirates oil minister Suhail bin Mohammed al-Mazroui said on Tuesday.

Mazroui was speaking at an energy conference in Abu Dhabi as Brent crude oil dropped into the $46 a barrel area, almost a six-year low, following a 5 per cent plunge on Monday.

"The strategy will not change..." he said. By not adjusting output, "We are telling market and other producers that they need to be rational and like OPEC, they need to look at growth in the international market for oil and need to cater that additional production to that growth."

He also said, "We have seen oversupply coming from shale oil and that needed to be corrected."

Mazroui said the oil price drop was not in any way affecting the UAE's investment to expand its oil production capacity, but that he did not expect any sudden rebound of oil prices.

"History tells us whenever we try to predict what will happen we will get it wrong. What I would say is that it is unlikely we will see a sudden rise - it will take some time...

"It will all depend on what we see in this quarter and the next quarter. The first half of 2015 will give us more data to predict what will happen."

Mazroui also said the oil market would "take time to stabilise. But will that time be two or three years? It depends how rational producers are."

In answer to a question, he said the government would encourage Abu Dhabi state fund Mubadala and state energy investor Abu Dhabi National Energy Co to look at acquisition targets and investment opportunities created by low oil prices.

"They will be looking at targets because this is an opportunity if you believe things will improve upwards, and we believe things will not stay for long at these oil prices.

"And so we will encourage these companies to look at targets, and we have seen in the past that these investments create best values for those who buy at that time."

Published on January 13, 2015 07:02