On Sunday, the 10th of February, an Egyptian finance ministry report revealed that the Egypt was expecting an average crude oil price of $67 a barrel for their 2019-2020 budget, however, the Egyptian financial year runs from July to June.
Over optimism on a higher crude oil price, the country spent over $1.7 billion on its fuel subsidies between July, 2018 to December, 2018, which were 26.651 billion EGP up from a year earlier. The Egyptian budget forecast regarding crude oil price appeared to be highly optimistic, since a day earlier, on Saturday, February the 9th, the Chief of International Monetary Fund, Christine Lagarde had cautioned the investors of crude oil dependent countries over an upcoming turbulence in the crude oil market.
IMF chief’s comment seemed to be galvanized by a gauge of global factors, including record US crude supply, sanction of Venezuelan state-owned oil firm PDVSA, alongside an extension of 2015’s sanction on Iran to curb their regional influence and purchasing power in order to limit their access to long range missile & nuclear programs.
Apart from that, geo-political tension over US-China trade conflict, which had yet to show any sign of improvement, had been another major repercussion fueling up the fears of investors and downsizing the crude oil price.
Meanwhile, Russian state-owned oil firm Chief forecasted earlier on January that the oil price would likely to be reside between $50-$55 for the most part of the year, largely catalyzed by the oil output cut by Saudi led OPEC nations, alongside Russia to balance the crude oil market.
At this standpoint, the Egyptian finance ministry report appears to be over-exaggerative.