Global oil markets are well supplied and oil prices between $70 and $80 per barrel are acceptable to producers, the oil minister of the United Arab Emirates said on Tuesday."The market is well supplied," Mohammed Al Hamli told reporters on the sidelines of an industry event but declined to say how the group would act when it meets in Vienna on March 17.
Oil price stablility has been achieved despite weakness in the global economy and unfavourable market fundamentals, he said.
World oil demand declined by 1.4 million barrels per day (bpd) in 2009 and this year world oil demand is forecast to grow by just 800,000 bpd, he said.
Demand for OPEC crude in 2009 fell by 2.3 million bpd to 28.7 million bpd and could fall an additional 100,000 bpd this year, Hamli said.
"Current oil price levels suggest that international oil markets are, for once, taking a long-term view," he said.
"The apparent mismatch between the oil price and short term market fundamentals is an illusion," he said.
OPEC's long-term global demand is expected to increase to 113 million bpd by 2030 from around 85 million bpd currently.
"Viewed from this perspective, oil prices are not high at all. It is clear that the age of easy oil is coming to an end," he said.
Oil producers, including the UAE, will continue to invest heavily at current price levels to ensure they meet growing demand and developing new spare production capacity, he said.
"The world can no longer afford to leave 63 to 65 percent of the discovered oil reserves in the ground," he said.
The UAE will not cut exports of oil but would develop alternative energy resources including nuclear power to meet surging domestic demand.
In December the UAE awarded a South Korean group a deal to build and operate four nuclear reactors in Abu Dhabi, the capital. The first plant will be commissioned in 2017.
"The objective is for nuclear energy to eventually account for 25 percent of the UAE's power requirements," he said. (Reuters)