Minister of Energy, Suhail Al Mazrouie, said that current world oil prices were 'fair and suitable' and the recent drop in prices were a short-term phenomenon and have nothing to do with market fundamentals.
'We believe, as oil producers, that the current level of world oil prices still provides a catalyst for present investment which are necessary for boosting output capacity,' the minister told Emirates News Agency (WAM) in the first interview he has given since taking office in March.
'However', this level will have negative impact on global economic recovery and outlook' he continued.
The minister told WAM ahead of the Vienna Energy Forum and the 163rd Meeting of the OPEC Conference to be held in Vienna from 28th-31st May that the recent fall in world oil prices were a short-term phenomenon not driven by market fundamentals.
'What concerns us in the UAE is a balance in the supply and demand equation.'
Al Mazrouie said that OPEC is currently producing 30.4 million bpd, slightly higher than OPEC's targeted output, but the figure reflected the continuous demand for OPEC crudes.
He noted that the world economy was improving and was projected to grow by 3.2%, saying: 'It is likely that world oil demand will remain relatively weak during 2013, with an increase of nearly 800,000 bpd over 2012's demand level. Demand for oil is expected to grow in 2014 if world economic growth persisted,' he added.
Locally, the minister said the UAE is producing 2.8 mbpd and is pumping billions of dollars in development projects to raise output capacity to 3.5 mbpd by 2017.