UAE economy minister expects oil to start recovering by mid-year

ABU DHABI: Oil prices are expected to start recovering by the middle of this year, along with improvement in major economies, UAE Economy Minister Sultan bin Saeed Al-Mansouri said.
“My expectation is that by the middle of this year we should see some turn in oil prices and an expected positive turn in the economies of Europe, the US and China,” he told reporters on the sidelines of a financial conference.
Al-Mansouri, speaking with Brent crude at about $48 per barrel, did not elaborate on why he expected a recovery in oil prices.
Other Gulf officials have indicated they are cautiously optimistic about oil turning up in that timeframe.
Asked if he stood by UAE officials’ previous forecasts of 4.5 percent gross domestic product growth for 2014, Al-Mansouri said: “We review on a quarterly basis and by March we have to review that on the basis of oil prices...
“Also we have to see what’s happening in the nonoil sector. If we have growth that matches the drop in oil prices, we can say yes, it will stay at 4.5 percent. If not, we have to review that.”
Industry sources, meanwhile, said Emirates General Petroleum Corp. (Emarat) has increased its 2015 spot and term volumes of jet fuel from last year because of an increase in demand from Dubai International Airport.
Passenger traffic at the airport, one of the world’s busiest, rose 5.9 percent in the first 11 months of 2014, according to latest statistics from the airport’s operator.
Demand from the airport could rise further as lower oil prices could encourage airlines to slash fuel surcharges on ticket prices, traders said.
In its latest tender, Emarat bought 60,000 tons of jet fuel for delivery into Jebel Ali in February from Aramco Trading Company at a premium of $3.40 a barrel to Middle East quotes, on a delivered basis, they said.
Emarat usually buys 40,000 tons of jet fuel every month, but its requirements for February increased due to rising demand from Dubai International Airport, one of the sources close to the matter said.
Its term volumes for this year have also risen, the source added.
The company has term contracts with Aramco Trading Company (ATC), Kuwait Petroleum Company (KPC) and Abu Dhabi National Oil Company (ADNOC) to buy 460,000 tons of jet fuel this year.
While the increase in overall term volumes was not immediately clear, Emarat contracted to buy 160,000 tons of jet fuel for 2015, about a third higher than last year, from ATC, Saudi Aramco’s trading arm, the source said.
This is the second year that Aramco has supplied jet fuel to Emarat, following recent capacity additions in Saudi Arabia.
Emarat stopped imports of gasoline after it handed over its retail stations to ADNOC from Jan. 1 this year, the source added.
Previously it imported about 1.2 million tons a year of gasoline through spot and term contracts and 60,000 tons of gasoil through a term agreement with ADNOC.
Its gasoil imports were halted this year after its main client switched to natural gas for power generation, the source said.
The company is now focusing on imports of jet fuel primarily and smaller volumes of liquefied petroleum gas and lubricants, he said.