Acceptable price of oil comes between $60, $70/barrel: Molla

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Mon, 11 Feb 2019 - 12:36 GMT

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Mon, 11 Feb 2019 - 12:36 GMT

FILE – Tarek el-Molla

FILE – Tarek el-Molla

CAIRO – 11 February 2019: Acceptable oil prices range between $60 and $70 per barrel, Minister of Petroleum Tarek el-Molla told CNBC on Sunday.

"If prices of crude increase significantly, we will start to see inflation and an exaggeration in the slowdown in consumption from the other side. If we see prices go down below a certain price, then we will see a slowdown in investments," the minister said.

"So, actually, the fair equation is to have a balanced price between the producers and the consumers, whereby each party is happy, continuing the growth of the global economy,” he added.

Molla further stated that oil markets were "somehow close" to a price that can keep both parties happy because although oil prices have fallen from peaks of around $114 a barrel in mid-2014, production costs have also fallen with technological advances.

"With the advancement of technology, new ways of producing oil have added new volumes to the market and this technology means you're reducing the cost per barrel, and what might have been accepted a few years ago back when we were talking about $100, or $90 or $80 a barrel oil wouldn't be accepted now."

Meanwhile, the Ministry of Finance estimated the average crude oil price during fiscal year 2019/2020 to be $67 per barrel.

According to the Finance Ministry’s statement, the state’s fuel subsidies hit LE 30.17 billion during July to December 2018, compared to LE 26.65 billion during the same period of the prior year.

Working to become a regional hub of energy, Egypt aims at attracting investments of $10 billion in the petroleum sector during the current year.

With gas production amounting to around 6.4 billion cubic feet per day, Egypt achieved self-sufficiency of gas by the end of September 2018.

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