MAHMOUD HABBOUSH

ABU DHABI (Bloomberg) -- Improving economies in Europe and elsewhere together with a continued decline in output of shale oil point to a recovery in demand for crude and an increase in prices next year, according to United Arab Emirates Energy Minister Suhail Al Mazrouei.

“I’m optimistic that we will see an upward correction in 2016,” he said Tuesday to reporters in Abu Dhabi. “What’s the percentage of correction? I can’t say it’s going to be a high percentage, but there will be an improvement on 2015.”

Al Mazrouei didn’t specify countries showing stronger growth, and he acknowledged that shale oil “is needed and has a role to play.” The market will determine how shale will contribute to future supply, he said.

The U.A.E., OPEC’s third-largest producer, has raised output this year amid a global glut, data compiled by Bloomberg show. The Organization of Petroleum Exporting Countries is competing for market share against high-cost suppliers, including some U.S. producers of shale oil. Brent crude, a global benchmark, has dropped 42% in the last 12 months and was trading at $49.14/bbl at 11:13 a.m. on the London-based ICE Futures Europe exchange.

State-run Abu Dhabi National Oil Co. will continue to invest in energy projects it has already awarded, even amid cheaper crude, Al Mazrouei said. “We have a long term view of the market. We know that prices fluctuate and will not stay as is.” 

Abu Dhabi is the U.A.E.’s largest emirate and holds most of the nation’s oil reserves.