Gulf Arabs see oil price as too low - Oman
By Daliah Merzaban
Tuesday, December 30, 2008
MUSCAT (Reuters) - Gulf Arab states are uncomfortable
with oil prices at below $40 as it means a greater
risk of running budget deficits, Makboul bin Ali bin Sultan,
Omani minister of commerce and industry, said on Monday.
Rulers at a regional summit in Oman need to coordinate
better to cope with the impact of lower crude and the
global financial crisis, he told Reuters.
"The Gulf is not comfortable at all at this level," he said in
an interview. "I think the level we need is towards $60 so
that we don't have any deficits. We (Oman) are obviously,
at $45 (a barrel budgeted), are projecting a deficit in the
region of $800 mln next year."
Oil prices have tumbled from a record peak above $147 a
barrel in July to around $38.40 a barrel on Monday on concerns
about waning global demand amid the financial crisis.
In his opening remarks, Oman's ruler Sultan Qaboos said
Gulf Arab countries also called for a change. Oman, an oil
producer, is not a member of OPEC.
"We should look into establishing a framework to stabilise
oil prices in the markets in a way that does not exhaust
consumers and meets the requirements of development in
developing nations while not harming producing nations,"
he said.
"We are looking forward to everyone's cooperation towards
this outlook for the future."
Gulf Arab leaders began a two-day economic summit with a
key focus on approving a long-planned pact that would
take them closer to issuing a single currency ahead of a
self-imposed 2010 deadline for monetary union.
But the annual heads of state meeting has been overshadowed
by the global financial crisis and, most recently, Israeli
air strikes on Gaza.
Omani Foreign Minister Youssef bin
Alawi bin Abdulla said the summit would
focus on strengthening economic coordination
among the six countries -- Saudi
Arabia, Kuwait, United Arab Emirates,
Qatar, Oman and Bahrain -- that comprise
the Gulf Cooperation Council, a
loose politic bloc.
"They will try to avoid any further damages
from the international financial crisis,
in that regard there is very strong
coordination," he told Reuters.
Bin Sultan noted that there was a fresh
impetus for countries to work togather.
"Of course some countries have surpluses,"
he said. "The problem is when countries have surpluses,
coordination doesnt get priority. The financial crisis
will push us for more coordination."
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