 |
Louisiana Light • 2 days | 77.96 | -4.14 | -5.04% | ||
|
Bonny Light • 20 hours | 81.66 | +1.55 | +1.93% | ||
|
Opec Basket • 2 days | 82.75 | -1.41 | -1.68% | ||
|
Mars US • 25 days | 79.71 | -2.05 | -2.51% | ||
|
Gasoline • 15 mins | 2.247 | +0.017 | +0.77% |
|
Bonny Light • 20 hours | 81.66 | +1.55 | +1.93% | ||
|
Girassol • 20 hours | 82.43 | +1.64 | +2.03% | ||
|
Opec Basket • 2 days | 82.75 | -1.41 | -1.68% |
|
Peace Sour • 19 hours | 58.61 | -0.68 | -1.15% | ||
|
Light Sour Blend • 19 hours | 62.46 | -0.68 | -1.08% | ||
|
Syncrude Sweet Premium • 19 hours | 67.06 | -0.68 | -1.00% | ||
|
Central Alberta • 19 hours | 60.61 | -0.68 | -1.11% |
|
Eagle Ford • 5 days | 72.02 | -1.56 | -2.12% | ||
|
Oklahoma Sweet • 2 days | 71.50 | -0.75 | -1.04% | ||
|
Kansas Common • 2 days | 65.00 | -0.75 | -1.14% | ||
|
Buena Vista • 2 days | 80.98 | -0.43 | -0.53% |
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IMF: Saudi Arabia Needs $80-85 Oil Price To Balance 2019 Budget
OPEC’s biggest producer Saudi Arabia would need oil prices at US$80-85 per barrel in order to balance its 2019 budget, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), has told Reuters.
Saudi Arabia’s officials, including Energy Minister Khalid al-Falih, don’t discuss publicly ‘targeted oil prices’ or a desired level of oil prices that would be comfortable to the Kingdom’s finances, but analysts and the IMF have estimates what oil price level would be enough to cover Saudi Arabia’s budget spending.
For this year, “if you take the (2019) budget as presented with everything remaining equal, a breakeven point would be around $80-$85 dollars,” the IMF’s Azour told Reuters.
The oil price slump in the fourth quarter of 2018 has certainly affected the public finances of the biggest oil exporting nations, including OPEC’s biggest, Saudi Arabia.
Although Azour doesn’t see the price slump affecting the Kingdom’s ability to finance itself, he expects that those lower prices would weigh on the fiscal position of Saudi Arabia.
For this year, the Kingdom announced its highest-ever budget, of around US$295 billion (1.1 trillion Saudi riyals). This breaks the previous record set in 2018, with budget spending at US$261 billion and it might spark concerns about the economy’s sustainability as the increase for 2019 includes a hefty bill for cost-of-living allowances introduced last year.
Last month, the IMF slashed its forecast for Saudi Arabia’s economic growth this year to 1.8 percent, down by 0.6 percentage point from the previous economic outlook in October, due to lower oil prices and lower oil production growth.
The IMF sees growth in Saudi Arabia for 2019 at 1.8 percent, compared to 2.4 percent expected last October, while it lifted its 2020 economic growth forecast by 0.2 percentage point from October to 2.1 percent.
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By Tsvetana Paraskova for Oilprice.com
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Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Related posts
Open57.81
Trading Vol.6.96M
Previous Vol.241.7B
More likely, the markets ought to be looking at demand. The Saudis simply can't sell their crude at prior volumes along with a sense of entitlement to inflated prices because there is an increasingly large glut out there...
The commodity is already in huge oversupply with accelerating output from the US, everyone else is either still able to sell despite "sanctions" or trying to maintain - or indeed increase - market share to balance their books, whilst the world market for crude over the coming year seems to be rapidly diminishing...
Since the 2014 oil price crash, Saudi financial reserves have declined from estimated $750 bn to less than $500 bn which are badly needed to prevent a devaluation of the Saudi Rial against the US dollar and also to support the record 2019 budget of $295 bn.
Any significant loss of oil prices could enlarge the Saudi budget deficit, affect Saudi Arabia's fiscal position and reduce rate of growth of the Saudi economy.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London