Oil prices are unlikely to rise above the current to $80 (£62) a barrel this year keeping the Middle East stuck in a crippling thee-year slump in prices, according to a minister from Oman.
Mohammed bin Hamad Al Rumhy said he did not think prices of crude oil would break out of the $70 (£54) level and added that he believed the current cost was “fair”.
He told CNBC: “I think for the rest of this year we should see stability between $70 (£54) and the high 70s (dollars a barrel), or low 70s to high 70s.
“Because this is the wish of all of us who are cooperating with OPEC to provide the market with enough crude to make sure that the consumers are not impacted and we think that the current price is a fair price.”
He also added that the current price of oil, between $70 (£54) and $80 (£62) per barrel, would “enable us to sustain our investment, and continue the business that will give us a guarantee of some form that the future is brighter than when the price was in the $30s and $40s a few years ago”.
Asked if he agreed with analyst expectations that prices could rise to $90 (£69) a barrel, he replied with “I don’t think so”.
Oman is the biggest producer of oil outside the Organisation of the Petroleum Exporting Countries (OPEC), founded in Iraq to unify the petroleum policies of its 15 member countries, which consist of Algeria, Ecuador, Iran, Lybia and Qatar to name a few.
Oman was severely affected by the oil price slump that took hold in 2015 and as a result, signed a deal with OPEC in 2016 to curb oil output in an attempt to support prices.
The agreement is said to have been the driving force behind the stability of the oil markets, though this has been heavily criticised by the US.
The decision of President Donald Trump to impose sanctions on major OPEC oil producer Iran has meant prices have again come under pressure.
The sanctions were imposed after being lifted in 2015 under nuclear accord that saw Mr Trump withdrew from an international deal that sought to limit Iran’s nuclear program in exchange for easing pressure on the country’s economy.
Now, new sanctions are expected to stifle the oil industry’s progress and potentially cause prices to rise again.
Today, oil company Brent Crude were trading at around $77 (£59) with West Texas Intermediate were just shy of the $70 (£54) mark.(Source: Express online)