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Fri 13 May 2011 03:15 PM

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Saudi seen needing $91 oil to fund gov't spending plans

The Centre for Global Energy Studies says high oil price necessary to cover cost of commitments

Saudi seen needing $91 oil to fund gov't spending plans

Saudi Arabia, the world’s
largest crude exporter, needs oil to trade at about $91 a barrel this
year to cover the cost of government programmes, according to the Centre
for Global Energy Studies.

The country
has “ratcheted up” spending and requires high prices to maintain the
commitments, CGES chief economist Leo Drollas said on Friday at the Platts
Crude Oil Markets conference in London.

The country
pumped 8.83 million barrels a day in April compared with 8.85 million
barrels in January, CGES estimated.

The price of the kingdom’s Arab
Medium grade, for sale to Asia, averaged $104.33 a barrel this year,
according to data compiled by Bloomberg.

The International Energy Agency cut its global oil demand growth forecast for this year on Thursday, due to persistent high prices and lower growth projections for developed economies.

The Paris-based agency warned in its monthly oil market report that high prices could dent the fragile economic recovery.

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