DUBAI - Signs of recovery in the global economy will support oil prices at current levels, but it is still too early to talk about raising production, the UAE energy minister said on Saturday.“There are certainly signs of recovery and that I think will support current level of pricing. Overall we are still not out of the woods yet,” Mohammed al-Hamli said on the sidelines of a conference in Dubai.
Oil prices fell nearly 3 percent to $77 a barrel on Friday after data showed the U.S. jobless rate jumped to a 26-1/2-year high in October, raising concerns about a potential rebound in fuel demand.
Energy markets have been watching economic data for signs of economic recovery, which along with lower supply from the Organization of the Petroleum Exporting Countries (OPEC) has helped to lift crude prices from $33 in December 2008.
The price recovery - up more than 70 percent this year - has led analysts to speculate OPEC will have to look at raising production soon to stop prices rising any further.
Deutsche Bank said last month oil prices may surge to $100 sometime in the next two quarters due to weakness in the U.S. dollar.
Hamli said OPEC is unlikely to raise output at its upcoming meeting on Dec. 22 in Angola.
“Right now raising production is not on the agenda,” he said.
OPEC has kept official output targets unchanged at meetings so far this year.
It has agreed to cut supply by 4.2 million barrels per day (bpd) since September 2008 due to falling demand and prices.
Hamli said the market is a “little bit” oversupplied due to high inventory levels.
“Inventory level is very high in terms of crude and refined products. So the market is a little bit oversupplied,” he said.
On compliance with OPEC quotas, Hamli said the UAE is “fully compliant” and that he is generally happy with the level of compliance from fellow OPEC members.
OPEC oil supply fell in October, the first decline since April, as lower output from Saudi Arabia, Iraq and Nigeria offset a further rise from Angola, according to a survey this week by news agency Reuters.
Supply eased to 26.38 million bpd from 26.40 million in September, the survey of oil firms, OPEC officials and analysts found.
The survey suggests OPEC has made 63 percent of promised supply cutbacks, in line with September.