UNITED ARAB EMIRATES: Oil prices to reach $90 at the end of the year, OPEC official

Record ID: 343413

  • Title: UNITED ARAB EMIRATES: Oil prices to reach $90 at the end of the year, OPEC official
  • Date: 3rd June 2009
  • Summary: KUWAIT (FILE) (REUTERS) ENTRANCE OIL REFINERY OIL REFINING EQUIPMENT WORKERS OPERATING REFINING EQUIPMENT VARIOUS TURBINES MORE REFINING EQUIPMENT
  • Embargoed: 18th June 2009 13:00
  • Keywords:
  • Location: United Arab Emirates
  • Country: United Arab Emirates
  • Topics: Economic News,Energy
  • Reuters ID: LVAB8QJJVBTL39GMZWMZAJ2I32PZ
  • Story Text: Oil prices could reach as high as 90 U.S. dollars by the end of the year and is likely to average 80 dollars in 2009, OPEC member Libya's top oil official said.
    U.S. crude hit a seven-month high above 68 dollars a barrel on Monday (June 1) on optimism that the global economy would improve.
    "I am expecting oil prices to rise in that a substantial amount of investors will enter the oil futures market and will continue investing. I am expecting that prices will increase until this yearto approximately 80 dollars. 80 dollars means that it will rise to 90 and even further before the end of the year to compensate for the drop that occurred during the beginning of the year," Shokri Ghanem said on Tuesday (June 2) at the World National Oil Companies Congress in Abu Dhabi.
    On Tuesday, Royal Dutch Shell Chief Executive warned that low energy investment could lead to a future sharp rise in crude oil prices.
    "I think the real concern, and you see more and more of it in the press is that if the oil prices stay volatile at a low level, then I'm afraid that there's too much slowdown in investments. Now what does it mean a slowdown in investment for the oil and gas industry? It's basically that the expansion of the capacity goes too slow. Whilst if one day we will really come out of this economic crisis, it has always happened, so it will happen this time again, and then the energy demands will pick up again, and then the surplus capacity which is basically now in the hands of OPEC will disappear again. So I think too low investments means the next price spike is to come. Timing is very difficult to say, but that is how I think about it," Jeroen van der Veer, Shell's outgoing chief executive said.
    Shell has pledged to continue investing despite a drop in crude prices from a peak of around 147 dollars a barrel last summer. The firm plans to invest 31bn-32bn dollars (about 20bn pounds sterling) in projects this year, compared with 30bn dollars last year.
    Abdulaziz Al- Judaimi, vice president for new business development for Saudi Aramco told the delegates the global recovery is not far away.
    "We will see oil business perspectives fundamentally driven by the dynamics of demand growth, the ability of non-OPEC producers to manage their current constrains and the evolution of the inventories."
    The congress in Abu Dhabi, 3rd in a row, sees oil and gas executives meeting and discussing the future of the industry.
    Until Thursday (June 5) when the congress closes its doors, the event will see over 60 of the highest calibre speakers and ministers and over 400 delegates address the key challenges facing National Oil Companies.
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