THE oil and gas industry in Singapore still has strong long-term growth prospects, despite short term movements in the oil prices, said Senior Minister of State for Trade and Industry S Iswaran on Tuesday.

He was speaking on Tuesday at the opening of OSEA 2008, an oil and gas exhibition and conference that drew 36 per cent more participants this year to over 1,300 companies.

Mr Iswaran said: 'After years of high double-digit growth, the industry now faces some near term uncertainties.'

But he said the 'long term outlook for the oil and gas industry remains positive.

'The fundamentals have not changed. The prospect for sustained demand for energy from both the developed and emerging economies remains intact.

'Hence, this is an ideal time for the industry to deliberate on how to cope with the short-term challenges ahead, so as to position itself for the long term opportunities.'

Oil prices surged to US$147 (S$286) in July and later moderated to about US$50 as the economic crisis put a damper on demand.

Oil fell below US$50 per barrel on news over the weekend that the Organisation of Petroleum Exporting Countries had deferred a cut in oil production that would have helped to push prices up till their next meeting on Dec 17 .

Cheaper oil not only reflects slowing demand, but may discourage further oil exploration and production because profit margins become tighter.

Speaking to reporters, Mr Iswaran said: 'The volatility in oil prices is always going to be there. But these are players who are seasoned, they ride through the volatility and look through to the long term, rather than being too preoccupied with oscillations in oil prices and other gyrations in the market.'