Reply #7: Unfortunately for the prince, the Saudis need $84/bbl to break even

[GliderGuider]

Higher Saudi spending pushes breakeven price of oil up 23%

Riyadh: Saudi Arabia's breakeven price for oil jumped an estimated 23 per cent after the kingdom promised the biggest public-spending increases in three decades, creating a new floor for crude as it trades near a three-year high.

More-generous benefits promised by King Abdullah Bin Abdul Aziz will cost $129 billion (Dh473 billion) over the next several years, according to John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi. The outlays will add $15.50 a barrel to the price Opec's largest producer needs to balance its budget, according to the median estimate of analysts surveyed by Bloomberg News.

The kingdom now needs oil to sell for at least $84 a barrel to balance its budget, according to the Bloomberg survey of six analysts. That's up from a median of $68.50 a barrel before the handouts, they estimated.