Kuwait Min Says Worried Budget Gap If Oil $30-$40/Bbl

Kuwaiti Oil Minister Sheikh Ahmad Abdullah Al Sabah said Friday the government is worried it will incur a budget deficit if the oil price falls to an average of $30-$40 a barrel this year.

However, he added that it would be comfortable if the oil price averages $50-$60 a barrel in 2009 and $70/barrel or more over the next three years.

“I’m not worried till I see oil hitting $30-$40 because that would mean a deficit in the Kuwaiti budget. Oil is a depletable commodity and we can’t afford to sell it at this price but have to conserve it. Nobody likes to see deficit in his budget,” Sheikh Sabah told Zawya Dow Jones in an exclusive interview.
“If prices remain at $50 for the next three years no one will invest in oil, even $60 is not attractive but $70 or $70 plus will be attractive for investments,” he added.

Sabah said he expects the oil price to rise in the third quarter to $50-$60/barrel and to $60-$70/barrel in the fourth quarter, but even if it remained at the $50-$60/barrel range this year it would be comfortable for Organization of Petroleum Exporting Countries members who don’t want to fuel the current global recession.

Wall Street Journal (through Google News)