IMF calls for early passage of PIB

The International Monetary Fund (IMF) has called for early passage of the controversial Petroleum Industry Bill (PIB), as it is the only way to transform the oil sector.
In a statement released by the IMF, it called for early passage of the bill, saying “directors welcomed reforms underway in the energy sector and looked forward to an early passage of the Petroleum Industry Bill.”
The IMF said its appraisal followed the conclusion of consultations between its executive board and Nigeria under the 2012 Article IV, on February 6, 2013.

Brent drops below $99; demand worries persist

Brent crude fell below $99 per barrel weighed by the prospect of sluggish fuel demand in top consumers in the United States and China and in addition to rising stockpiles of U.S. crude.

More bleak economic news came courtesy of the International Monetary Fund (IMF), which trimmed projections for this year and next - implying limited upside for oil demand growth.

The North Sea benchmark has lost nearly 6 percent over the past five sessions in a wider commodities rout triggered by data showing growth in China, the world's second largest oil burner, had slowed unexpectedly in the first three months of 2013.

The head of the International Energy Agency, Maria van der Hoeven, said the oil price decline was proof that the market was adequately supplied.

Brent crude shed $1 to $98.91 after sinking earlier to $98.80, the weakest since July 2012. U.S. crude slipped $1.29 to $88.43.

IMF: $98 per barrel oil benchmark needed to balance Saudi budget by 2016

International Monetary Fund (IMF) has warned that Saudi Arabia's government should watch it’s spending if it wants to preserve the country's oil wealth for future generations. IMF said the country’s government is spending more than it should but did not specify an appropriate level of spending. However, it advised the government to be flexible in providing social welfare benefits and broaden its tax base so as to ensure its expenditure was efficient.

In an annual assessment of the Saudi’s economy, IMF said that "while the government has built significant policy buffers, fiscal spending is above the level consistent with an inter-generationally equitable drawdown of oil wealth."

Saudi Arabia, in response to unrest in the Arab world, had boosted spending to a record 804 billion riyals ($214 billion) in 2011, 39 percent more than initially planned and 23 percent higher than in 2010, its fastest growth in a decade. In May, Finance Minister Ibrahim Alassaf said there might be a bit of extra spending this year, adding that the kingdom's fiscal position was comfortable.

The OPEC member, who overshot its annual budget plans by an average 23 percent in the past decade, outlined spending of 690 billion riyals in its 2012 budget. Due to heavy spending, the Gulf country's dependency on oil has risen notably. The price of crude that is needed to balance the government budget is projected to rise to $98 per barrel by 2016 from an estimated $80 in 2011, the IMF said in April. However, robust oil prices, currently above $110 per barrel, have been helping to boost Saudi Arabia's fiscal cushion.