Finance Minister says production hikes by other oil producers will weigh on energy prices
Production hikes by other oil producers will weigh on energy prices in 2013, potentially cutting into Saudi Arabia's fiscal surplus, Finance Minister Ibrahim Alassaf said on Sunday.
The world's top oil exporter said on Saturday that it ran a budget surplus of SR387bn ($103.2bn) in 2012 as high energy prices and strong output levels generated revenue of SR1.24trn.
For next year it has conservatively budgeted spending of 820 billion riyals and income of SR829bn, although based on recent fiscal performance both figures are likely to be a lot higher.
"The results of this year are exceptional ... The international conditions and the increase in production by some states (in 2013) will have negative effects on prices, that's why we're being conservative," Alassaf said on Al-Arabiya television.
Saudi Arabia has maintained high production in the past two years to help avert oil price spikes. However, new output from fellow-OPEC member Iraq and from projects in North America, may drag on crude prices and lead Riyadh to cut production.
While next year's budget plan envisages revenue of SR829bn, if oil prices stay above $100 a barrel, the actual 2013 surplus will be far larger.
The 2012 budget had forecast this year's revenue at SR702bn, only 57 percent of the estimated actual income.
Monica Malik, an independent economist at investment bank EFG-Hermes, estimated the 2013 budget implied an oil price of around $64-67 a barrel and average oil output of around 9.5 million barrels a day.
In November, Saudi Arabia produced 9.90 million barrels a day, a Reuters survey showed.