Saudi Arabia bases budget on oil at $58 per barrel

Riyadh: Saudi Arabia, the Middle East's biggest economy, has based its record budget for next year on an average crude oil price of about $58 (Dh212) a barrel, people familiar with the matter said.

"Yes, it $58 a barrel, which is lower than the expected average for next year," one person told Zawya Dow Jones.

Several banks earlier this month significantly boosted their expectations for the price of a barrel of oil in 2011, with some seeing it averaging $100 next year and $120 by the end of 2012. Noting that world oil demand came "roaring back" in 2010, Goldman Sachs projected 2011 average prices of $100 a barrel on the strength of "sustainable" petroleum demand growth.

"The government is using a conservative oil price assumption of about $58 per barrel of WTI on production of 8.7 million barrels per day to determine its budget, according to our estimates," said John Sfakanakis, Riyadh-based chief economist at Banque Saudi Fransi.