Arab light crude rose to average of $46 in March

The average price of Saudi Arabian light crude oil rose to $46.2 per barrel in March, above the break-even point for the national budget, compared to $37.2 in February, central bank data showed on Wednesday.

The average price of Arab light crude was $95 per barrel for all of 2008 and $67.60 in 2007, according to the data published on the website of the Saudi Arabian Monetary Agency (SAMA).

Oil prices have dived from a record $147 a barrel hit in July to around $48 on Wednesday after a global economic recession hit demand.

The world's top oil exporter has cut the official selling price for Arab light crude for May to refiners globally for the first time in five months.

The last time Saudi Arabia cut prices for Arab light was in December, shortly before an OPEC meeting in Algeria which saw the group agree to a record 2.2 million barrels per day supply reduction to help stabilise prices.

Arab light crude accounts for 50 to 60 percent of the kingdom's total oil exports, said John Sfakianakis, chief economist of HSBC's Saudi affiliate SABB.

The Saudi 2009 budget was based on an average price of $37 for the barrel of Saudi oil and $43 for the WTI, he said.

Saudi Arabia increased budgeted spending for 2009 and, with the fall in world oil prices, projected a SR65bn ($17.3bn) deficit, which would be its first since 2002.

Saudi Arabia and other core Gulf OPEC producers will not seek to push oil prices beyond $50 a barrel in the short-term, to help nurse the global economy out of recession, analysts say.

Saudi Arabia is the only OPEC member and the only Arab state in the G20 leading world economies. (Reuters)

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