By Gavin Davids
Fellow OPEC member, Libya, has called for prices to be pushed to $100 a barrel.
The UAE believes that OPEC has successfully balanced the oil market at a price level that accommodates world economic growth, its representative to the bloc said on Saturday.
In a report published in The National, Ali al Yabhouni, the OPEC governor for the UAE, said: “Our concern is that prices should not rise to a level where they hurt global economic growth. It is clear that at this level that is not happening.”
His comments come a few days after Libya called for the export bloc to push for a price of $100 a barrel, after it had been held between $65 and $85 a barrel since March last year.
Analysts had predicted a decline in prices due to a glut of oil in consuming countries inventories, as fears of a renewed economic slowdown increased this summer. However, prices remained stable; a result Yabhouni said was due to the ‘special value’ markets placed on oil.
He said: “It is clear that there is a surplus of oil in the market. Prices are high because international markets believe oil is an intrinsically valuable commodity.”
However, Libya said last week that OPEC should seek a price of $100 a barrel in order to compensate for an increase in the cost of food imports.
A broad index of food prices maintained by the UN Food and Agriculture Organisation (FAO) has increased by 23 percent since the start of the previous year.
Several OPEC states, lead by Saudi Arabia and the UAE, have publicly backed a price between $70 and $80 a barrel, as it is believed to generate enough revenue for exporters without tipping importing nations into recession.
Keep rising the prices of oil and you'll put all your customers out of business, then you might as well leave it in the ground :)