crude oil

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Oman Posted Strong Revenue Growth in 2010

Revenues Up

Compared to what was expected for 2010 there has been a significant increase in the real budget revenue as well as expenditures in Oman over the past year.

Government revenue expanded by 24% to RO 7916.5 million in comparison to the expected budgetary estimate of RO 6380 million.

Expenditures, Too

Government expenditures also rose, by 11% to 7965.3 million from RO 7180. These figures were supplied by the Central Bank of Oman (CBO.)

The exceptional growth in income was credited mostly to an increase in the price of crude oil in the international marketplace.

Price of Oil Up

According to the CBO, Oman’s average price for crude oil increased by 35.2% to a high of $76.64 per barrel in 2010 up from $56.67 per barrel.Exports rose by 10.6% as well.

The production of natural gas also rose during 2010, by 7.2%, which also contributed to the rise in government revenues.

OPEC Meeting This Week in Vienna

The Organization of Petroleum Exporting Countries is scheduled to meet this week in Vienna. Their task will be to strike a fine balance between setting oil prices just right so that the international economy can continue on its slow and tedious recovery without having to deal with an extra burden of rising oil prices, while at the same time making up for the lack of oil flowing from Libya.

Oil Production Will Stay Steady

Analysts believe that OPEC will be forced to hold the level of oil production steady, with no serious changes on the horizon. OPEC is made up of 12 member nations, and together they produce roughly 40% of the world’s oil supply. The Wednesday meeting will be held in the midst of growing global fears that a significant increase in the price of crude oil will strike a blow at the hesitant international economic recovery which will lead to a decrease in the demand of oil worldwide.

The International Energy Agency (IEA) has requested that OPEC increase oil output and so avoid another harmful rise in prices, taking into consideration that during the coming summer months Northern Hemisphere oil demand will increase.

Rising Oil Prices Blow to Economy

Brent oil prices have risen a startling 21% so far this year, mostly in response to the widespread protests and violence which have occupied much of the past six months in the Middle East and North African region, with a large contribution from Libya, an OPEC member state.

“I would expect OPEC to leave quotas unchanged, rather than raise them, given the growing evidence that global demand is slowing,” said Capital Economics analyst Julian Jessop. “There is speculation in the market that they will be doing something to acknowledge the supply problems in Libya.

“Regardless of what OPEC happens to do — prices have further to fall,” Jessop added, referring to recent economic data showing that one of the world’s most important oil consumers, the United States is having a rough economic time of it and will most likely reduce consumption rather than pay more for the crude.