The top energy official in the UAE said the OPEC producer believes the oil market is reasonably well supplied for now as Brent crude rose above $107 a barrel yesterday to hit a seven-week high.
Energy Minister Mohammed bin Dhaen Al-Hamli also told reporters in Dubai that the UAE is satisfied with current oil prices, which have been edging higher in recent days.
"Yes, we are happy with the price," Al-Hamli said on the sidelines of an event to announce an upcoming energy conference in Dubai.
"The market is fairly well supplied," he added.
His comments suggest the UAE does not see a need for urgent adjustments to crude output by the 12-member producer bloc.
The country stands willing to supply customers with oil as they need it, Al-Hamli added.
"They ask for a quote, we give them a quote," he said.
Prices for benchmark US crude oil have risen to around $ 90 a barrel over the past week.
Prices rose yesterday as Middle East tension brought supply concerns into focus and as more optimistic investor sentiment about the global economy bolstered the demand outlook.
Brent crude gained for a seventh straight day, rising $ 1.78 to $106.94 a barrel by 1348 GMT and hitting $ 107.48 earlier, the highest since May 30. US oil gained $ 1.60 to $ 91.47.
"Within just a week, prices have climbed by more than 8 percent, primarily on the back of geopolitical risks," said Carsten Fritsch, analyst at Commerzbank. "The increase in the price of crude oil is likely to continue in the short term."
Analysts said the geopolitical concerns outweighed the latest US Department of Energy supply report, which showed crude inventories in the world's top consumer fell less than expected last week.
"Overall, we are more concerned about the latest bombings in Syria and Bulgaria than about the DOE statistics," said Olivier Jakob, analyst at Petromatrix, in a report.
Oil and other riskier assets such as equities have been drawing support from investor optimism the worst may be over for the global economy.
Brent has gained around 20 percent since falling to an 18-month low in late June. It had slumped since the year's high of more than $128 in March, weighed by concern demand would slow due to Europe's debt crisis and weaker growth in other regions.
Some technical indicators also suggested the rally could continue. Brent is in a positive momentum, having posted a string of higher highs and higher closes, Jakob said. Its relative strength index, a closely watched technical signal, is at 65, below the 70 mark indicating the market is overbought.
Brent is gaining additional support from constrained supply of the North Sea crudes which underpin the contract. August North Sea output is set to reach a 2012 low due to maintenance work and natural decline.
The Buzzard oilfield will be shut for several weeks from early September, its operator Nexen said.
The oil minister of Kuwait, another Gulf oil producer, recently described the global oil market as relatively stable.
Oil traders have been closely watching the effect on global oil supplies after a European Union ban on Iranian oil came into full effect July 1.
The UAE is currently producing about 2.6 million barrels of oil, which mostly comes from Abu Dhabi.
The UAE on Sunday inaugurated a much-anticipated overland oil pipeline that bypasses the Strait of Hormuz, the route for a fifth of the world's oil supply. Iran has repeatedly threatened to block the waterway at the mouth of the Gulf if its own supplies are cut.
The new UAE pipeline, which ends at the Indian Ocean port of Fujairah, is designed to carry at least 1.5 million barrels a day of crude. Peak capacity is expected to eventually rise to 1.8 million barrels daily.
UAE says oil market fairly well supplied; price hits 7-week high
