UAE energy minister says oil prices ‘very reasonable’

LONDON – Oil prices rose yesterday as the United Arab Emirates (UAE), a member of the Organisation of Petroleum Exporting Countries (Opec), described current price levels as ‘very reasonable’.

Crude futures had fallen earlier yesterday amid doubts over the strength of economic recovery in the United States, the world’s biggest energy consumer, analysts said.New York’s main contract, light sweet crude for February delivery jumped 54 cents to US$78,54 dollars a barrel.Brent North Sea crude for delivery in March rose 35 cents to US$77,46 a barrel in London midday deals.UAE Energy Minister Mohammad bin Dhaen al-Hamli yesterday said that world oil prices are ‘very reasonable.’Hamli was speaking to reporters on the sidelines of a four-day alternative energy forum being held in the UAE capital.He was subsequently asked if he preferred prices to be in excess of US$100 a barrel and said: ‘I don’t like over 100 and don’t like 30.’’I am not comfortable with volatility in prices,’ he said. At its last meeting in December, the Opec oil producers’ cartel warned of lingering weakness in the world economy as it decided to hold its crude output quotas unchanged.Oil prices jumped by around 80 per cent in 2009 as traders were heartened by evidence that the battered global economy was on the mend, with the eurozone, Japan and the United States escaping a fierce recession.However crude futures have struggled to make much headway in early 2010 as economic data disappoints.’Oil is under pressure primarily from economic considerations,’ said Purvin and Gertz energy analyst Victor Shum.’Some of the economic data out of the US were not really robust and so these data raised doubts about the health of the US consumer and the strength of the US economy.’Figures released Friday showed US consumer prices barely rose in December and were interpreted by economists as a sign of lingering weakness in the economy, where consumer spending is a major driver of economic activity.’The US is still in the grip of intense disinflationary forces, despite the basis effect lifting the headline year-on-year rate. Deflation risk is real,’ said Ian Shepherdson, chief US economist at High Frequency Economics.Meanwhile, the International Energy Agency (IEA) on Friday said oil demand in 2010 would be ‘sluggish’ in the developed world, with emerging markets accounting for any increases.The agency left unchanged a prior forecast of a 1,7 per cent rise in global demand this year to 86,3 million barrels per day. – Nampa-AFP