PHOTO
27 November 2016
B y REJIMON K
Muscat: Oman will be affected if oil prices drop further following Saudi Arabia’s decision to pull out of planned talks with Russia, a Majlis Al Shura member and economists in Oman, said.
"If oil prices go further down, it will have an impact on the Oman economy,” Tawfiq Al Lawati, the Shura member, told the Times of Oman.
Meanwhile, there are reports that uncertainty over whether Opec will agree to cut production at the group’s meeting next week weighed on crude prices.
Despite Friday’s steep losses, US and benchmark Brent crude oil prices eked out a second straight week of gains.
Brent crude settled down $1.76, or 3.59 per cent, at $47.24 a barrel. US crude settled down $1.90, or 3.96 per cent, at $46.06 a barrel.
“Oman’s 2016 budget is based on an oil price of $45 per barrel. Any price below that will cause additional damage,” Al Lawati said.
Saudi Arabia has pulled out of planned talks with non-Opec nations, including Russia as disagreements about how to share the burden of supply cuts stood in the way of a deal to boost prices just days before a make-or-break meeting in Vienna.
Opec officials were scheduled to meet with non-members including Russia on Monday before a ministerial meeting in Vienna two days later.
The meeting was later cancelled entirely after the Saudis decided not to take part.
There are reports that Saudi Arabia wants an Opec deal in place before conversations with other producers such as Russia.
Recently, the International Monetary Fund (IMF) had reported that the country’s “break-even” price for a barrel of oil this year is $73.
Despite the price of a barrel of crude rising to over $50 for the first time since August, the IMF experts reckon another $23 per barrel is required just to balance the country’s books.
“The IMF estimates fiscal break-even oil price for Oman at a high of $73.1 this year and a higher $76.7 next year - one of the highest among the GCC nations,” Dr Nasser Saidi, a member of the IMF’s Regional Advisory Group for MENA, told Times of Oman.
On Friday, Oman crude was traded at $46.53 per barrel.
Loai B Bataineh, general manager and head of investment banking group, Oman Arab Bank, said that Saudi pulling out from the talks will affect the global oil market and definitely have an impact on Oman.
“Saudi, an Opec member, co-operating with Russia, a non-Opec member, would have helped the oil market a lot. Failure to reach an agreement with Russia will put more pressure on the market,” Loai said.
Loai expressed the hope that during the winter, as demand goes up, prices may follow suit.
Mubeen Khan, chairman of Institute of Chartered Accountants of India Muscat Chapter, said that he was confident that issues would be sorted out between Saudi and other parties.
“Minor issues will be sorted out within Opec and Saudis would be back to the table with non-Opec members soon, hence I don’t think oil prices would see any major slide except some minor fluctuation even when speculators are bent upon creating bearish sentiment once again,” the finance expert said.
“Non-Opec oil producers led by Russia have already agreed an output freeze and we are all waiting for the implementation of the deal agreed between Opec and non-Opec oil producers in Algeria. The problem is now with Opec as two prominent Opec members – Iran and Iraq, are requesting some concessions from proposed output freeze or cut,” he added.
According to the expert, Oman as part of non-OPEC block seems to be in agreement that output freeze or cut should be put in place.
“The proposed freeze and cut agreement will take away 1.2million barrels per day from global crude supplies which will definitely boost prices. It is just a matter of time before this happens, but I am sure it will ultimately happen. I see oil prices touching $60 per barrel within the next three months once the deal is implemented,” he added.
In the aftermath of a severe fall in global oil revenue, Oman’s government posted a budget deficit of OMR4.32 billion ($11.4 billion) in the first eight months of 2016, according to latest official figures.
B y REJIMON K
Muscat: Oman will be affected if oil prices drop further following Saudi Arabia’s decision to pull out of planned talks with Russia, a Majlis Al Shura member and economists in Oman, said.
"If oil prices go further down, it will have an impact on the Oman economy,” Tawfiq Al Lawati, the Shura member, told the Times of Oman.
Meanwhile, there are reports that uncertainty over whether Opec will agree to cut production at the group’s meeting next week weighed on crude prices.
Despite Friday’s steep losses, US and benchmark Brent crude oil prices eked out a second straight week of gains.
Brent crude settled down $1.76, or 3.59 per cent, at $47.24 a barrel. US crude settled down $1.90, or 3.96 per cent, at $46.06 a barrel.
“Oman’s 2016 budget is based on an oil price of $45 per barrel. Any price below that will cause additional damage,” Al Lawati said.
Saudi Arabia has pulled out of planned talks with non-Opec nations, including Russia as disagreements about how to share the burden of supply cuts stood in the way of a deal to boost prices just days before a make-or-break meeting in Vienna.
Opec officials were scheduled to meet with non-members including Russia on Monday before a ministerial meeting in Vienna two days later.
The meeting was later cancelled entirely after the Saudis decided not to take part.
There are reports that Saudi Arabia wants an Opec deal in place before conversations with other producers such as Russia.
Recently, the International Monetary Fund (IMF) had reported that the country’s “break-even” price for a barrel of oil this year is $73.
Despite the price of a barrel of crude rising to over $50 for the first time since August, the IMF experts reckon another $23 per barrel is required just to balance the country’s books.
“The IMF estimates fiscal break-even oil price for Oman at a high of $73.1 this year and a higher $76.7 next year - one of the highest among the GCC nations,” Dr Nasser Saidi, a member of the IMF’s Regional Advisory Group for MENA, told Times of Oman.
On Friday, Oman crude was traded at $46.53 per barrel.
Loai B Bataineh, general manager and head of investment banking group, Oman Arab Bank, said that Saudi pulling out from the talks will affect the global oil market and definitely have an impact on Oman.
“Saudi, an Opec member, co-operating with Russia, a non-Opec member, would have helped the oil market a lot. Failure to reach an agreement with Russia will put more pressure on the market,” Loai said.
Loai expressed the hope that during the winter, as demand goes up, prices may follow suit.
Mubeen Khan, chairman of Institute of Chartered Accountants of India Muscat Chapter, said that he was confident that issues would be sorted out between Saudi and other parties.
“Minor issues will be sorted out within Opec and Saudis would be back to the table with non-Opec members soon, hence I don’t think oil prices would see any major slide except some minor fluctuation even when speculators are bent upon creating bearish sentiment once again,” the finance expert said.
“Non-Opec oil producers led by Russia have already agreed an output freeze and we are all waiting for the implementation of the deal agreed between Opec and non-Opec oil producers in Algeria. The problem is now with Opec as two prominent Opec members – Iran and Iraq, are requesting some concessions from proposed output freeze or cut,” he added.
According to the expert, Oman as part of non-OPEC block seems to be in agreement that output freeze or cut should be put in place.
“The proposed freeze and cut agreement will take away 1.2million barrels per day from global crude supplies which will definitely boost prices. It is just a matter of time before this happens, but I am sure it will ultimately happen. I see oil prices touching $60 per barrel within the next three months once the deal is implemented,” he added.
In the aftermath of a severe fall in global oil revenue, Oman’s government posted a budget deficit of OMR4.32 billion ($11.4 billion) in the first eight months of 2016, according to latest official figures.
© Times of Oman 2016
