“The most difficult phase for the economy is coming to an end,” Scacciavillani told the Times of Oman.
OPEC agreed to a production cut late last year which allowed the prices to rise, prompting Oman’s crude oil cost to rise above $67 — a three-year high for the gulf nation.
“The prices of oil show that the most difficult phase for the economy is coming to an end. If prices remain at $65- $70 levels, the flow of resources in the public coffers will be strong and help the overall economy,” according to the chief economist.
This spike is expected to lessen the deficit as oil prices account for 71 percent of the country’s income. Oman’s recent budget set 2018 oil prices at an estimated $50, 25 percent below the current cost.
“I don’t see any reason why oil prices would decline now. The fundamentals are strong, and as global supply dips and demand increases, there is a synchronized rebound in the oil market. This is expected to stay,” Scacciavillani said.
Confident traders as well as strong global economic growth have driven up demand for oil, sustaining prices at above $60.
“The worst is over. The economy is in an upbeat mode. Brent has broken the psychological barrier of $70 and it doesn’t look like prices will go lower any time soon. I expect prices of oil to remain around $70-$75 at least for the next couple of months,” Mubeen Khan, a Muscat based CA and financial analyst, told the English-language daily.