DUBAI - The expected rise in oil prices to an average of $80 per barrel in 2010 will help boost government spending in the UAE, especially on infrastructure projects, the Dubai Chamber of Commerce and Industry said in a report issued on Wednesday.

A combination of US dollar depreciation, increasing equity prices and improvements in demand have lifted crude oil prices significantly since its low of $34 a barrel in February 2009, according to the Dubai Chamber study. US crude oil futures were trading near $79 a barrel on Wednesday at 1530GMT, but for February delivery it fell 13 cents to$78.74 a barrel by 1124GMT.

“With the promising prospects for 2010, especially in light of the expectations of the oil prices rising to $80 per barrel, indicates that the government’s handling of the economic situation has strengthened investor confidence and provided the much-needed boost to the overall economy,” Dubai Chamber Director General Eng Hamad Buamim said.

The report said that most experts expect a rise in world demand for crude oil next year and hence prices. If this turns out to be an accurate forecast, then the UAE government will continue to remain in a financially strong position. This will aid public investment budgets,particularly in infrastructural projects in 2010. This will come on the top of the easing in accessing financing and increased market sentiment which will clearly put the country back onto the road of economic recovery, it said.

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