The UAE's energy minister said supply and demand should balance out in the first quarter of 2019
Saudi Arabia would need oil to be priced at $80-$85 a barrel in order for the top oil exporter to balance its budget this year, an International Monetary Fund (IMF) official told Reuters.
The kingdom’s breakeven oil price depends on the level of oil production, its oil revenues transferred to the budget and the performance of its non-oil revenues this year.
If everything remains equal, the 2019 budget shows a breakeven point would be around $80-$85, said Jihad Azour, director of the IMF’s Middle East and Central Asia department.
The UAE’s energy minister said this week that supply and demand in the oil market should balance out in the first quarter of 2019.
Suheil al-Mazrouei told the three-day World Government Summit in Dubai, “We are removing enough oil to correct the market.”
In January, OPEC cartel countries and other major oil producers began implementing a deal to cut output by 1.2 million barrels a day to halt the price drop, with most oil producing nations complying to the cuts, Mazrouei said.
However, the oil market remains highly volatile, with prices hovering above $60 a barrel after recovering from as low as $50 a barrel, a figure that remains far below the $85 a barrel oil hit in early October.
Saudi Arabia’s energy minister Khalid al-Falih said in mid-January he expected the oil market to rebalance within weeks.
Oil prices crashed in mid-2014 from $100 a barrel to below $30 a barrel due to an excess in supplies and a drop in global demand. It led the Organisation of Petroleum Exporting Countries to cooperate with non-OPEC producers, mainly Russia, to reduce output by 1.8 million barrels per day from the beginning of 2017. It helped prices rebound, but they dropped again after producers abandoned production cuts in mid-2018.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.