Saudi Arabia says oil market fluctuation remains a major challenge for economy

DUBAI (Reuters) – Saudi Arabia said on Tuesday the COVID-19 outbreak has made predicting the oil market “increasingly challenging,” warning that oil market fluctuation is a major challenge for the economy.

The world’s biggest oil exporter has cut oil output this year as part of a deal with OPEC and other producers to stabilise the oil market, which hit a 21-year low below $16 per barrel in April.

Brent crude settled at $50.76 a barrel on Tuesday.

“In view of the uncertainty surrounding the pace of the global economic recovery and the potential persistence of the crisis, predicting the state of the oil market becomes increasingly challenging,” the Ministry of Finance said in its budget statement for 2021.

Saudi Arabia will continue to play an effective role in achieving stability in the oil market and implement its plan for economic diversification, the budget statement said.

Saudi Arabia’s average oil output has declined by 5.7% on an annual basis from January to October 2020 to 9.3 million barrels per day, the statement said, citing data from OPEC.

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