SAUDIS REVENUE WILL UP TO $280 BLN
BLOOMBERG - Saudi Arabia's plan to erase its budget deficit by 2023 relies on a scenario that would see oil revenue surge by about 80 percent, according to people with knowledge of the matter.
Under a six-year fiscal program, officials predict rising oil prices and output will push income from oil sales to 801.4 billion riyals ($214 billion) from 440 billion riyals this year, the people said on condition of anonymity because they aren't authorized to share the data publicly. It assumes the price of oil will reach $75 a barrel. Non-oil revenue, excluding income from the Public Investment Fund, would increase 32 percent to 337 billion riyals, they said.
The forecasts show how essential crude prices are to repair public finances even as Crown Prince Mohammed bin Salman tries to prepare the kingdom for the post-oil era. The kingdom has led a drive among major non-OPEC members to stabilize oil markets through production cuts that have helped Brent crude prices gained 17 percent this year to $66.87 a barrel on Wednesday.
The oil revenue forecast "looks challenging given the development in the shale industry," said Monica Malik, chief economist at Abu Dhabi Commercial Bank. "The strong oil revenue growth in 2017 will be difficult to repeat."
Authorities expect oil production to increase from an average of 10 million barrels a day this year to 11.03 million barrels in 2023. For 2020, they predict output of 10.45 million barrels a day, generating 605 billion riyals in revenue, the people said.
The Ministry of Finance declined to comment.
The scenario may signal that the world's biggest oil exporter doesn't currently see a need to extend the agreement to cut production beyond 2018 as a global supply glut eases.
Easing austerity "could prove premature if oil prices disappoint," Jean-Michel Saliba, an economist at BofA Merrill Lynch in London, wrote in a report last week. "Energy policy is likely to remain focused on supporting the oil market rebalancing and enabling the government's shift to boost growth near-term."
The kingdom's benchmark Tadawul All Share Index gained 0.3 percent at 11:05 a.m. in Riyadh.
Top Saudi officials last week rolled out an expansionary budget for 2018 to revive an economy battered by austerity and low oil prices. Gross domestic product contracted 0.5 percent in 2017.
A document outlining some details of the fiscal program and published by the Saudi Press Agency showed authorities expected non-oil economic growth to stay above 3 percent through 2020 from 1.5 percent this year. The document has since been deleted from the agency's website.
|(FIGURES IN BILLIONS OF RIYALS)||2017||2018||2019||2020||2021||2022||2023|
|Government Reserves at SAMA||584||456||411||345||276||267||271|
Source: Saudi Ministry of Finance
Economy Minister Mohammad Al Tuwaijri, speaking after the budget release on Tuesday, said that the kingdom "found it appropriate to move to a more optimistic scenario" in fiscal planning. "We're very satisfied with what happened in 2017, and we'll continue on this journey."
The budget deficit narrowed to about 9 percent of GDP this year.
|GDP growth (%) 1.7||-0.5||2.7||2.7||2.8|
|Non-oil GDP growth (%) 0.2||1.5||3.7||3.1||3.2|
Source: Ministry of Economy and Planning, General Statistics Authority
|September, 24, 15:35:00|
|September, 24, 15:30:00|
|September, 24, 15:25:00|
|September, 24, 15:20:00|
|September, 24, 15:15:00|
|September, 24, 15:10:00|
ARAB NEWS - Saudi's Aramco Trading Company (ATC) expects to increase its oil trading volume to 6 million barrels per day (bpd) in 2020, 50 percent higher than current levels, the company's top official said on Monday.
BAKER HUGHES A GE - U.S. Rig Count is down 2 rigs from last week to 1,053, with oil rigs down 1 to 866, gas rigs unchanged at 186, and miscellaneous rigs down 1 to 1. Canada Rig Count is down 29 rigs from last week to 197, with oil rigs down 13 to 135 and gas rigs down 16 to 62.
REUTERS - International benchmark Brent crude for November delivery LCOc1 was up 26 cents, or 0.33 percent, at $78.96 a barrel by 0647 GMT. U.S. West Texas Intermediate crude for October delivery CLc1 was up 7 cents, or 0.10 percent, at $70.39 a barrel.
BLOOMBERG - Russia's oil output is currently fluctuating between 1.54 million and 1.55 million tons a day -- driven mainly by state-run giant Rosneft PJSC -- the official said, asking not to be named as the information isn’t public yet. That equates to 11.29 million to 11.36 million barrels a day, beating the previous record of 11.25 million barrels a day set in October 2016 before Russia agreed with the Organization of Petroleum Exporting Countries to cut production.