Reuters cited Mr Mohammed bin Dhaen Al Hamli oil minister of UAE as saying that a reasonable price for crude oil is between USD 80 per barrel and USD 100 per barrel.
Mr Al Hamli said that a high oil price would lead to more investment in alternative energy and also more investment in crude production capacity, which would mean less volatile prices. We need a reasonable price to continue building capacity. The higher the capacity, the less fluctuation in prices, except that capacity that is not in used is very expensive.
He said that Brent crude fell to USD 108.99 per barrel at 0428 GMT while US crude dropped to USD 92.58 per barrel. The price of US crude which traded in a range of just over USD 25 from 1990 to the end of 2003 swung from a high of USD 147.27 in July 2008 to as low as USD 32.40 in December of the same year.
He added that the price of oil at USD 147, that was not primarily due to fundamentals. A lot of speculation.
