ABU DHABI: United Arab Emirates Oil Minister Suhail Al-Mazrouei (right) talks to journalists during the Global Aerospace Summit in Abu Dhabi yesterday.—AFP ABU DHABI: United Arab Emirates Oil Minister Suhail Al-Mazrouei (right) talks to journalists during the Global Aerospace Summit in Abu Dhabi yesterday.—AFP

ABU DHABI: Emirati Oil Minister Suhail Al-Mazrouei said yesterday that current market prices are forcing most producers to freeze oil output levels, insisting it made "no sense" to pump more crude.

"Current prices are forcing everyone to freeze. So I think it is happening as we speak," Mazrouei told reporters in Abu Dhabi. "It does not make any sense for anyone to increase production at current prices." Mazrouei said he was aware of talks to hold a meeting between the Organization of Petroleum Exporting Countries and non-OPEC producers, but that he has not received an invitation.

"We hear about a meeting. I have not received an official invitation for an OPEC and non-OPEC meeting," he said. "If there is an invitation, the UAE is always cooperating within OPEC," he said, adding that the cartel would first have to hold talks to decide on whether to take part in such a meeting.

"The majority of the world, 99.8 percent, maybe 99.9 percent, are not going to increase production. To the contrary many producing assets are losing now at the current oil prices... We are seeing a reduction and we will see a reduction in those fields," he said.

"This is all good news towards balancing the market. We just need to be patient. It's not happening in weeks or months. Correcting to a sustainable price will take time. I'm still optimistic that before the end of year we will see a correction."

OPEC leader Saudi Arabia and non-OPEC producer Russia, the world's two largest oil exporters, agreed last month to freeze output at January levels to prop up prices if other nations agreed to join the first global oil pact in 15 years.

Front-month Brent crude futures were trading at $39.10 per barrel at 0745 GMT yesterday, up 38 cents from their last settlement and around a third higher than their January low, when prices fell to levels not seen since 2003. Yet the freeze accord has so far failed to have a dramatic impact on crude prices, partly because OPEC's third-largest producer Iran plans to steeply raise production after the lifting of international sanctions on the Islamic Republic in January.

Price rise

Oil prices are expected to rise gradually over the next five years but will remain well below the pre-crash level, according to a survey of professionals who follow the oil industry. Brent prices are expected to climb from an average of $40 per barrel in 2016 to between $65 and $70 per barrel by the end of the decade.

The price expectations are based on an email survey sent to more than 2,500 energy professionals working in oil and gas, banking, hedge funds, research, professional services, trading and specialist media earlier this month. More than 800 responded. The full tabulation of responses as well as summary statistics are available for download. The results are more bullish than the futures strip, where Brent is currently trading around $50 per barrel on average in 2020. In the survey, there is a high degree of consensus about prices for the rest of 2016. Most forecasts for 2016 are tightly clustered between $35 and $45 per barrel. Nearly all lie between $30 and $50.

Brent prices have averaged just $33 per barrel so far in 2016, so most respondents expect prices to be slightly firmer in the remainder of the year. But in the latter years covered by the survey there is far less consensus about what will happen, reflecting uncertainty about how far and how fast prices might recover from the crash.

The central forecast rises progressively by $5 to $10 per year between 2017 and 2020, but the range of expectations also becomes successively more dispersed. Most respondents expect prices to rise to around $65 to $70 per barrel by 2020. But as many as a quarter think prices will remain stuck below $55, while another 25 percent think they will have risen to more than $80 by then.

One way to measure the increase in uncertainty is to look at the standard deviation of survey responses over longer time horizons. The standard deviation of responses grows from less than $8 for 2016 to $20 by the end of the decade, suggesting uncertainty about prices at the end of the decade is almost twice as great as in the near term.

For 2016, 90 percent of forecasts lie in a $20 range from $30 to $50 per barrel, but by the end of the decade the comparable range is $60 wide from $40 to $100 per barrel. Despite market chatter about a looming supply crunch as a result of cuts in investment spending, only 7 percent of respondents expect Brent prices to climb back to $100 or more by the end of the decade. - Agencies