Emirates: The UAE on Sunday called for new investment in energy sector to cater to rising demand and said it is committed to supporting balance in oil market.

Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Infrastructure, has underlined the need of accelerating new investments to meet rising energy demand as a number of Opec+ member countries cut oil production.

In statements to the Emirates News Agency (Wam) on the sidelines of the Global Energy Forum, which began in Abu Dhabi on Saturday, the minister affirmed the UAE's commitment to providing the necessary support to ensure a balanced oil market in line with its plan to advance the five million barrels per day production target to 2027.

"The world requires trans-country natural gas pipelines, such as the Dolphin Gas Pipeline project — a natural gas project between Qatar, the UAE and Oman that was the first of its kind to contribute to improved energy security and integration among Gulf countries," the minister said.

He also emphasised the importance of accelerating investments in gas exploration and production as it is one of the major sources of energy today.

The UAE government has already evolved a strategy to invest $160 billion in clean and renewable energy sources over the next three decades.

Global oil and gas investment was expected to increase by $26 billion last year as the industry continues its recovery from the worst of the Covid-19 pandemic.

"Overall oil and gas investments was expected to grow by four per cent to $628 billion last year from $602 billion in 2021," according to Rystad Energy analysis.

Geopolitical factors

Al Mazrouei added that there are geopolitical factors in the region and around the world that influence the global energy map. The minister expressed his hope that the current year 2023 would see more stability in the energy markets, as well as a decline in gas prices and volatility.

“Price variations have a significant impact on the economies of many countries, and since there is such a high demand for gas, we hope for new projects to be launched in this sector,” the minister added.

The global oil benchmarks, Brent and West Texas Intermediate (WTI), staged a recovery in prices last week as Brent recovered 8.6 per cent of its losses and WTI prices climbed by 8.4 per cent.

Oil prices settled more than a dollar a barrel higher on Friday as Brent crude futures settled at $85.28 a barrel, up by $1.25, or 1.5 per cent. WTI crude futures rose for the seventh-straight session to settle at $79.86 a barrel, up by $1.47, or 1.9 per cent.

A survey of 30 economists and analysts forecast Brent crude would average $89.37 a barrel in 2023, about 4.6 per cent lower than the $93.65 consensus in a November survey.

Opec+ to meet in Feb

The Organisation of the Petroleum Exporting Countries (Opec) and allies including Russia, will meet in February to assess market conditions. The market insiders and energy analysts are of the view that the group is expected to reduce oil production again to lift prices after recent declines.

Opec and its allies increased crude oil production by 140,000 barrels per day in December, according to the latest Platts survey by S&P Global Commodity Insights.

Opec's 13 countries pumped 28.98 million bpd in December, an increase of 110,000bpd from November, led by Nigeria, while 10 non-Opec partners including Russia added 13.73 million bpd, a rise of 30,000bpd.

"Combined, the alliance produced 42.71 million bpd in the month," according to the survey.

Despite the overall increase, the alliance's output still massively lags its production targets, with the gap at 1.80 million bpd in December, according to S&P Global calculations, as most members face technical or financial difficulties in sustaining output.

"Opec+ production capacity was down 3.7 million bpd due to fewer investments in the oil sector," Al Mazrouei said on Saturday.

Opec+ had announced a two-million bpd cut to production in October as global oil prices fell under $90 a barrel.