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Saudi Arabia’s government expects to earn more from oil next year, an optimism that defies most price forecasts for crude and contrasts with the kingdom’s history of making conservative financial assumptions.

The world’s biggest crude exporter is estimating that oil will average about $80/bbl in 2019 assuming its production continues at 10.2 MMbpd. Saudi Aramco won’t increase its allocations to the government, according to Ziad Daoud, Bloomberg’s chief economist in the Middle East. He estimates oil will need to trade above $95/bbl for the year for the kingdom to balance its budget.

Analysts forecast oil in 2019 will hover around $73/bbl, according to data compiled by Bloomberg. Saudi Arabia sees its oil revenue rising to a five-year high next year, but will still post its sixth-straight budget deficit.

2013 2014 2015 2016 2017 2018 2019 estimates Oil Revenue ($ billions) 276 244 119 89 117 162 177 Oil Output (million barrels per day) 9.5 9.7 10.2 10.4 10 10.3 10.2* Brent Crude ($/bbl) 109 100 54 45 55 72 80 Budget Balance ($ billion) 42 -46 -104 -111 -61 -36 -35

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