Bloomberg News

Saudis Need $74 Oil Price to Balance 2012 Budget, Jadwa Says

December 28, 2011

(Adds 2011 budget output and prices in fourth paragraph.)

Dec. 27 (Bloomberg) -- Saudi Arabia, the world’s largest oil exporter, needs $74 a barrel for its crude exports next year to balance its budget, Jadwa Investment Co. said.

For Saudi oil prices to reach $74 a barrel, the kingdom needs around $70 a barrel for WTI and $78 a barrel for Brent, Jadwa, a diversified investment business based in Riyadh, said in an emailed report today. Saudi Arabia, the largest Arab economy, forecast a budget surplus of 12 billion riyals ($3.2 billion) in 2012 in a statement yesterday.

Daily Saudi production next year may average 8.8 million barrels and domestic consumption will average 2.4 million barrels as the country consumes more natural gas locally instead of crude, according to the statement.

The 2011 budget was based on a price for Saudi oil of $56 per barrel and production of 8.3 million barrels per day, Jadwa estimated.

“With a few days of the year left, it seems likely that the actual price of Saudi oil will average $105 per barrel,” it said. “Production will be around 9.3 million barrels per day, after it was raised to compensate for the shortfall from Libya.”

Saudi Arabia raised output this year as demand rose, oil minister Ali Al-Naimi said on Dec. 12 in Vienna. The kingdom pumped 10.047 million barrels of crude a day in November, he said. That’s the highest since at least 1980, according to data from the U.S. Energy Department.

--Editors: Chris Peterson, James Kraus

To contact the reporter on this story: Wael Mahdi in Khobar at wmahdi@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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