Saudi Arabia budget deficit swells on oil price fall

[webfact]

Saudi Arabia budget deficit swells on oil price fall

LONDON: -- Saudi Arabia's budget deficit soared to $98bn (£65.7bn) this year as the world's biggest oil exporter counted the cost of falling crude prices.

In the first budget under King Salman, the kingdom said revenues reached 608bn riyals (£108.7bn; $162bn), down 15% on official expectations.

Spending for the year hit 975bn riyals, some 13% more than forecast.

Full story: http://www.bbc.com/news/business-35188807


-- BBC 2015-12-29

[Scott]

As nice as it is to see falling oil prices for consumers, the problem is that the lower they go, the more that has to be pumped and sold to keep the countries dependent on oil revenues in the black. The more they sell, the lower the oil prices go.

[Farma]

Saudi domestic petrol prices are increasing 50% today.

91 octane is now US 16 cents per litre

95 octane is now US 24 cents per litre.

Edited December 29, 2015 by Farma

[NeverSure]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

[namatjira]

Basically the oil price drop is essential to the Saudis, normally when the prices fall opec cuts production...this time they did not ,

They have created this fall by trying to protect their markets, a low price puts a lot of frackers out of business, and that's what it's all about...preserving their market....they can pump it cheaper than the frackers can frack it......

[Scott]

Another off-shoot of the 1973 oil embargo was that auto manufacturers started making much more efficient engines. People insulated their homes, put in double glaze windows and other efforts to safe energy. At that time, it was reasonably easy to save on energy because it had been cheap for so long that people were careless. Saudi Arabia never fully recovered from the oil embargo. It was clear that big energy users could cope, even if it was difficult.

As far as frackers go, they put them out of business, but it will only be temporary. Once oil prices start to rise, then harder to extract oil gets profitable and they will return quicker than flies to a pile of poop.

[NeverSure]

Basically the oil price drop is essential to the Saudis, normally when the prices fall opec cuts production...this time they did not ,

They have created this fall by trying to protect their markets, a low price puts a lot of frackers out of business, and that's what it's all about...preserving their market....they can pump it cheaper than the frackers can frack it......

Scott said it.

Also they aren't putting the frackers out of business. At most they are putting them temporarily on the sidelines to be back when prices rise.

It is Saudi et. al. that is selling its oil cheaply and in large amounts. This time they don't have a big enough percentage of the world oil supply to cut back and manipulate prices higher. In fact, oil is being discovered faster than it is being used.

If Saudi continues a race to the bottom they will wake up some day out of oil and other countries will own the next batch that's valuable. That may be the day the frackers shine.

Cheers.

[IMA_FARANG]

The U.S. has now allowed U.S oil produces to export U.S. oil. but that is only a small drop in a big glut.

More important is Iran and the removal of export embargoes on Iranian oil coming now and soon increasing.

I was working there in Saudi Arabia in the 1970's and into the 1980's and saw how the Saudis were overspending.

I am not unhappy that now they are feeling a little "tight".

I know for a fact (I saw them) that at one point there was a Saudi Oil Reserve storage (in case of war with Iran and Iraq) stored near Dharan in large underground oil tanks that was capable of supplying the entire crude output of Saudi for a whole year if need be.

[tominbkk]

I'd love to see the UAE go broke.

[baboon]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

Quite. Couldn't have happened to a nicer bunch of people...

[NeverSure]

The U.S. has now allowed U.S oil produces to export U.S. oil. but that is only a small drop in a big glut.

More important is Iran and the removal of export embargoes on Iranian oil coming now and soon increasing.

I was working there in Saudi Arabia in the 1970's and into the 1980's and saw how the Saudis were overspending.

I am not unhappy that now they are feeling a little "tight".

I know for a fact (I saw them) that at one point there was a Saudi Oil Reserve storage (in case of war with Iran and Iraq) stored near Dharan in large underground oil tanks that was capable of supplying the entire crude output of Saudi for a whole year if need be.

Actually I think it's similar to what accountants and bankers call "the rule of doubles". If you write a check for $10 but accidentally enter into your checkbook as a deposit, you'll be off by double - $20. First you made the mistake of neglecting to subtract it, and next you made the mistake of adding it. Each has a $10 consequence of its own.

The US is a big user of oil and if it stops importing so much that's one thing. If it also starts exporting even a small amount that another thing and both have consequences on the world supply and price.

I'm very happy that ME policies aren't influenced by a need for those countries' oil.

[Andaman Al]

I'd love to see the UAE go broke.

This is about Saudi, why do you want to see the UAE go broke?

[Somtamnication]

Yep, Karma does exist even in Saudi Arabia.

[FangFerang]

No. I think it's retaliation for the 18 of 22 Saudis that did the 9/11 debacle. Good. Towelhead arrogant shucksters.

[elgordo38]

As nice as it is to see falling oil prices for consumers, the problem is that the lower they go, the more that has to be pumped and sold to keep the countries dependent on oil revenues in the black. The more they sell, the lower the oil prices go.

Not to worry they can introduce QE and print money like the West does. They can also print up bonds backed by their oil and flood the market. There are so many dodgy things they can do to stay afloat. I agree with the above poster that although there are savings in low prices it could cause a grave problem in the oil junk bond market and if panic sets in it could in turn move to the regular bond and stock market and cause a real panic. This market is so wobbly that it only needs one small event or smell of trouble to trigger a problem and the herd cannot all fit through the narrow doorway at the same time. Edited December 29, 2015 by elgordo38

[Pakboong]

I am fairly confident that Saudis were in cahoots with the west to impact Russian GDP which is 50% based on the sale of oil and gas, it didn't go as planned so now we wait to see if the major players back off and let prices rise to a more natural level.

[Eric Loh]

The U.S. has now allowed U.S oil produces to export U.S. oil. but that is only a small drop in a big glut.

More important is Iran and the removal of export embargoes on Iranian oil coming now and soon increasing.

I was working there in Saudi Arabia in the 1970's and into the 1980's and saw how the Saudis were overspending.

I am not unhappy that now they are feeling a little "tight".

I know for a fact (I saw them) that at one point there was a Saudi Oil Reserve storage (in case of war with Iran and Iraq) stored near Dharan in large underground oil tanks that was capable of supplying the entire crude output of Saudi for a whole year if need be.

Iran is the wild card now that sanctions have been lifted. They need the revenues and will market very agreesively into Europe which will be a bane to the Russian as Iranian oil can be used by European refineries. Will not be suprise to see oil down to USD20s. It will just quicken SA collapse and it looks inevitable.

[alfalfa19]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

hopefully their economy will collapse completely, and they can go back to living in desert sandstorms, eating with right hand, wiping butt with left.

[NeverSure]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

hopefully their economy will collapse completely, and they can go back to living in desert sandstorms, eating with right hand, wiping butt with left.

I have always looked at them as people who, if they didn't have that oil would be doing exactly as you say. I don't know what part if any they had in 9/11, but after the 1973 oil embargo I'll never feel sorry for them.

They have totally failed to develop a real economy based on production of goods and services. They buy rather than develop technology. I look at them as medieval camel humpers who have oil.

[khaowong1]

Anything that brings Saudi Arabia to it's knee's, I'm in favor of. The West has kissed their ass long enough.

[aussiandrew]

Saudi domestic petrol prices are increasing 50% today.

91 octane is now US 16 cents per litre

95 octane is now US 24 cents per litre.

It's true luckly I filled up two days ago costs 32 SAR for the Toyota 4x4!

[NeverSure]

Today Saudi has announced big cuts in spending and increases in costs to the people for basic items.

Stung by low oil prices, Saudi makes unprecedented cuts.

Eight years ago oil was $144 per barrel. Less than a year ago it was $100. ATM it is sitting on $37. These countries that are dependent on oil revenues to support their governments and people are drowning.

I still can't say I'm sorry 'bout that. They asked for it.

Cheers.

[thaibeachlovers]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

hopefully their economy will collapse completely, and they can go back to living in desert sandstorms, eating with right hand, wiping butt with left.

Hmmm They still eat with right hand etc. They even use a stick to clean their teeth because that's what Mohommed did, LOL.

However I'm with you on the let them eat sand bit.

After 4 years in SA I would be happy to see the whole lot go broke. That doesn't include the Bedu, who were lovely, but they still lived in tents and were poor, so it won't make any difference to them.

The reason SA is in the poo is because the parasite royal family takes most of the money to live a lifestyle none would believe unless been there.

[webfact]

Saudis brace for ‘prolonged period’ of low oil prices



PARIS: -- Saudi’s Arabia’s planned cuts in spending and energy subsidies show the world’s largest crude oil exporter is bracing for a prolonged period of low oil prices.

Analysts said applying a value-added tax as a way to rein in spending showed Riyadh was expecting lower revenues.

Oil prices are just under 40 dollars a barrel, well below the price needed for investers to consider more expensive sources of production such as shale oil or tight oil in North America to be attractive.

50 percent petrol price hike
Motorists queued to fill their cars on Monday night before higher fuel prices came into effect. A rise from 16 cents to 24 cents a litre showed an immediate impact of economic changes in the kingdom.

The Saudi government said its price hikes for fuel, water and electricity were part of politically sensitive subsidy reforms.


-- (c) Copyright Euronews 2015-12-30

[thaibeachlovers]

What a shame, the king might have to stop building new palaces that he'll never live in. You wouldn't believe the opulence the royal family live in unless you'd seen it.

[NeverSure]

Let them eat cake sand.

[Credo]

I wonder how this is going to work out when they can't afford to fund the Hajj?

[craigt3365]

What a shame, the king might have to stop building new palaces that he'll never live in. You wouldn't believe the opulence the royal family live in unless you'd seen it.

Wow....nice house! LOL

[sanukjim]

Hoo Ray Hoo Ray

[i claudius]

I remember about 1973 when the oil cartel (OPEC) including Saudi cut back the supply of oil to drive the world price up. Prices skyrocketed and gas stations ran out of gas. Stations that had gas had long lines and limited purchases to 10 gallons. Then they started selling to cars with even numbered plates on even numbered days and vice versa. It was common to see stations with signs out that said "no gas." OPEC was rolling in money even though it hurt the other economies.

I have to wonder if some of this is that the US has discovered more proven oil reserves than all of the rest of the world combined. Surely the US was a big buyer from the cartel where now it is actually a net exporter of oil. They don't know where to put all of the oil.

The US economy isn't based on pumping oil although it's a bonus. But countries like those in OPEC and Russia and Argentina are sucking air right now.

Somehow I'm really not "sorry 'bout that". They brought it on themselves by driving prices so high that people went hunting for more, and a lot has been found. They turned oil into gold that people went looking for and they found it.

Cheers.

hopefully their economy will collapse completely, and they can go back to living in desert sandstorms, eating with right hand, wiping butt with left.

Just like the rest of their following in all the other countrys that follow this faith .