United Arab Emirates minister of economy says $80/b oil ‘ideal’

International Energy Agency not optimistic, says oil prices will remain weak

The UAE’s minister of economy, Sultan al-Mansouri, said Sunday that an oil price of $80 /b would be “ideal” as the global economy tentatively moves towards higher growth.

oil price
Sultan Saeed Nasser Al Mansoori, Minister of Economy of the United Arab Emirates at the World Economic Forum, Summit on the Global Agenda in Abu Dhabi, United Arab Emirates 2015. COURTESY World Economic Forum

Anticipating a pick up in the global economy in the second half of 2016, Mansouri, speaking with journalists in Abu Dhabi, said the world could not afford to let oil stay around $50/b.

His prediction  goes against the International Energy Agency, which forecast earlier this month that oil demand growth would be slowing in 2016 amid a weaker outlook for the world economy after reaching a five-year high of 1.8 million b/d in 2015.

“We could see a pick up in China and some other parts of the world,” GulfNews.com reported al-Mansouri saying.

“The world cannot afford the price of oil to stay at this level. Oil at $50 per barrel is not only a challenge for the UAE but challenge for the rest of the world because so many other nations are dependent on oil.”

According to state-run WAM news agency, the UAE government Sunday approved a slightly lower federal budget of Dirham 48.56 billion (13.2 billion) due to sustained low oil prices.

The first cut in years, down from Dirham 49.1 billion in 2015. The IMF said last week it expects its first budget deficit since 2009 from the UAE.

According to Platts, the fund warned Gulf countries to raise non-oil taxes and reduce subsidies to adjust to the new oil price environment. Only the UAE as attempted to streamline expenditures, by cutting fuel subsidies for motorists in August.

The United Arab Emirates approved a lower budget for 2016.