Oil Market and Budget Developments

Crude prices drop on strong supply, European economic woes

• Crude prices have fallen significantly from their March peaks. OPEC production remains high while recent elections have heightened concerns about economic prospects in Europe.
• Global oil demand should grow by less than 1% in 2012. Alongside strong oil supply growth, this could help generate the first significant increase in global stock levels in six years.
• An average oil price for FY12/13 of between $90 and $118 pb could generate a budget surplus of KD 3 bn to KD 13 bn for Kuwait this year, the 14th consecutive surplus.