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The UAE is optimistic about a recovery in oil demand in 2021.
Rollout of coronavirus vaccines and improvement in relations between the US and China are likely to increase the demand for oil, Energy minister Suhail Al-Mazrouei told Sky News Arabia. “Recovery will be gradual, and won’t happen in a quarter or two,” he said.
The OPEC+ alliance of oil producers has successfully mitigated the impact of reduced demand, said Al-Mazrouei, and the UAE hopes more producers would join in the future.
The OPEC+ agreement earlier this month to increase oil supply will mean that downturns in hydrocarbon sectors across the GCC states will start to ease.
London-based economic research and consultancy firm, Capital Economics, expects that brent crude will reach $60per barrel by the end of next year and the Gulf economies will start to benefit from higher prices.
According to the Central Bank data, UAE's real GDP is projected to recover to 2.5 percent in 2021, with non-oil GDP growing by 3.6 percent.
Oil prices inched higher on Thursday, helped by late-day buying in a low-volume session to close out the week.
The market built gains overnight as Britain and the European Union reached a post-Brexit trade deal, reversed those gains, and then rebounded during the U.S. session to end modestly higher. Brent crude futures settled 9 cents higher at $51.29. Volumes were light on the last trading day before the Christmas holiday.
(Writing by Seban Scaria; editing by Daniel Luiz)
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