Oman crude jumps above $54

untitled-1By Samuel Kutty — MUSCAT: Dec 28: The price of Oman crude oil financial contract for February delivery jumped to $54.47 a barrel at Dubai Mercantile Exchange on Wednesday. Oman crude has now strengthened by over $11 per barrel since the agreement to cut production by oil producers in November. The Sultanate has already made an announcement to cut oil production by 45,000 barrels a day. With Wednesday’s rise of $1.16 per barrel from the previous close, the average price of Oman oil has now stabilised at $44.54.

At the same time, the recent upward spike has added around 17 per cent to DME Oman crude since late September and more than 110 per cent from the lowest levels in more than a decade seen at the start of the year. “This has helped the government bring down the country’s budget deficit since September. The upward momentum in the prices will have a positive effect on the coming budget,” said a financial expert at a local bank.

Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, is expected to unveil the 2017 General Budget next week without any major austerity measures. The average price of oil is expected to remain at the current year’s level of $45 per barrel in the budget According to data from the National Centre for Statistics and Information, the deficit stood at RO 4.8 billion in the first 10 months of the current year as a result of 25 per cent slump in revenues.

The Omani crude oil registered an average price of $38.3 per barrel during January-September 2016 compared with $59.8 per barrel during the same period last year. The data showed that the total income registered a decrease of 25.5 per cent compared with revenues earned during the same period in 2015. Oman’s total oil exports during the January-October period increased 4.2 per cent to 268.7 million barrels in 2016 as against 257.9 million barrels in the same period of 2015.