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Muscat: Oil prices are likely to stay below $50 a barrel this year unless the US economy rebounds, said Mohammad Al Romhi, Oil Minister of Oman, the Middle East's largest non-Opec crude producer.
"I don't see much movement in the oil price this year, prices won't go much above $50 a barrel," Al Romhi said in an interview in New Delhi yesterday. "Of course, it depends on Obama's success - he wants to create four million jobs, so if we have four million new drivers tomorrow that we don't have today, demand will rise and so will the price."
Crude oil fell for a sixth day in New York yesterday, extending a weeklong 25 per cent slump on speculation oil inventories increased last week as demand declines. Crude oil for February delivery declined as much as $1.49, or 4 per cent, to $36.10 a barrel in electronic trading on the New York Mercantile Exchange. It was at $36.33 a barrel at 12:01 pm Dubai time.
Oil prices, after reaching a record $147.27 a barrel last July, have fallen for a consecutive six months as a deepening recession in the world's biggest consuming regions such as the US, Europe and Japan slashes fuel use.
Demand in the US, which consumes a quarter of the world's oil, is falling as job losses lower car use. The US government said January 9 that last year's job losses marked the biggest drop in payrolls in 63 years. Automakers General Motors Corp and Chrysler LLC are at risk of collapse should sales fall further.
An Energy Department report tomorrow will probably show US crude stockpiles gained 2.25 million barrels in the week ended January 9, according to a Bloomberg survey. That would be the 14th gain in the past 16 weeks. The US economy will contract 1.5 per cent in 2009, a monthly poll of economists showed.
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