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Finding the crude oil ‘sweet spot’

Crude oil prices of $50-55 per barrel would be a "sweet point" for Egypt, the country's minister of trade and industry told CNBC on Thursday.

WTI and Brent crude oil futures are trading around $47-$48 a barrel, following a partial rebound this year after a sharp rout from mid-2014 onwards.

Egypt is the largest non-OPEC oil producer in Africa, according to the Energy Information Administration.

Oil derrick with sunset
Harold Sund | Image Bank | Getty Images

Egyptian Minister of Trade and Industry Tarek Kabil told a CNBC-hosted panel discussion at the St. Petersburg International Economic Forum (SPIEF) in Russia that the price decline had helped Cairo balance its books.

However, he added that this balance could still be achieved if prices crept higher – plus multinationals would be encouraged to invest in Egyptian oil.

"Oil prices went down, which is helping the budget. But there is also a … sweet point where it would help the budget, but also encourage companies like Total to invest we think $50-$55 would meet our target," he said.

The slump in oil prices has hit investment in Middle Eastern oil exploration and production, concurred Arnaud Breuillac, Total's president of exploration and production.

"This will create a very severe shortage in three or four years' time," he warned the panel.

Dimitris Tsitsiragos, vice-president at International Finance Corporation, said oil-producing countries could use the price slump as a spur to make structural reforms and diversifying their economies.

"Any structural reforms, they have an objective to take the economy away from a state-run one to one where the private sector … is the engine of growth… the creator of jobs," he told the panel on Thursday.

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