UAE support for oil price as demand picks up

“The market is stable, the supply is stable. The price is acceptable and comfortable for the producing countries and the consuming countries," said the undersecretary of the UAE Ministry of Energy.

Oil prices approaching US$110 a barrel are “acceptable” for producers and consumers, and Opec does not need to change its output target, said the UAE’s deputy energy chief.

The group is scheduled to next meet in June in Vienna to debate its 30 million barrel per day (bpd) production ceiling, which has remained unchanged since December 2011.

“I don’t think there will be any change in the quota,” said Matar Al Neyadi, the undersecretary of the UAE Ministry of Energy. “The market is stable, the supply is stable. The price is acceptable and comfortable for the producing countries and the consuming countries.”

Brent futures for delivery next month ticked up half a per cent yesterday to US$107.82 a barrel as concerns of conflict between Ukraine and Russia were stoked by a confrontation between Ukrainian and Russian forces in Slovyansk. Russia called for an emergency UN Security Council Meeting.

Last month the group pumped 29.6 million bpd, slightly below its quota, because of cuts in Iraq and Libya and reductions in Saudi Arabia, according to the International Energy Agency, the consumers’ watchdog. The IEA raised its estimate of how much Opec supply the world needs by 350,000 bpd to 30.6 million bpd for the second half of this year.

Prices remain below the level that Opec members Nigeria and Venezuela require to break even on their budgets, according to recent data from Deutsche Bank. The South American country, home to the world’s biggest oil reserves, needs an average price of $121 a barrel this year.

Opec has yet to decide on individual quotas for members, which it eliminated with the last production ceiling in 2011, or on a new leader for the organisation.

“We need to see,” said Mr Al Neyadi. “No need to anticipate anything, the meeting will be in two months and I am sure at the meeting anything could happen.”

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