By Andrew Torchia

DUBAI, Aug 30 (Reuters) - The cost of insuring against a Saudi Arabian sovereign debt default has dropped sharply in the past few days because of the rebound of global oil prices, market data showed on Sunday.

Last Monday, five-year Saudi credit default swaps SAGV5YUSAC=MG soared as high as 120 basis points, from around 60 bps late last month.

At their high, CDS implied the world's top oil exporting country had a probability of default during the next five years of close to 10 percent, roughly the same as the Philippines PHGV5YUSAC=MG - a dramatic sign of how the plunge of oil prices since mid-2014 has eroded investor confidence in the Saudi economic model.

But in the last few days, oil prices have rebounded sharply and Brent LCOc1 , the global benchmark, finished Friday up $2.49 or 5 percent at $50.05 a barrel. It gained 10 percent on the week.

This has left Saudi CDS quoted at 84 bps - about 30 bps below the Philippines' current level and 14 bps below Spain ESGV5YUSAC=MG . Saudi Arabia has not, however, returned all the way to the area of South Korea KRGV5YUSAC=MG , at 65 bps.

With oil prices at $50, Saudi Arabia is still running a state budget deficit estimated by analysts at around 15-20 percent of gross domestic product, but it has huge fiscal reserves which could cover such a deficit for at least several years. ID:nL5N10L136

Saudi stock prices .TASI surged 4.2 percent early on Sunday in response to oil's rebound, bringing them 15 percent above last week's low but still down 13 percent month-to-date.

One-year U.S. dollar/Saudi riyal forwards SAR1Y= have not dropped sharply, however, and were last quoted at 300 points, not far from last week's 12-year highs - suggesting there is still significant demand to hedge against the risk of riyal depreciation due to low oil prices.

(Editing by William Hardy) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))

Keywords: SAUDI CDS/