Bandar Seri Begawan - Brunei Darussalam is all set to shoot for the stars as world oil price rockets sky-high, potentially swelling the nation's coffers. And that is good news for the country, which has embarked on a comprehensive national development plan.
That would also help to meet the growing budget needs towards maintaining the Sultanate's welfare state status.
The population has been steadily growing, which is now inching towards the half-million mark as compared to 250,000, in the 1960s.
That means more money to maintain the countries free services, which largely depend on oil and gas exports as the mainstay.
It costs money to upkeep the free educational and medical systems going and there are umpteen subsidies both visible and hidden that keep the people happy.
There is no personal income tax and there is a large civil service where majority of the subjects are given jobs.
And now what is seen as a bonanza for Brunei is the fact that international oil price has shot up to around US$94 per barrel that will keep the country in clover.
And some people in the Sultanate are watching hopefully as the oil price relentlessly goes upwards towards the symbolic US$100 from the previous long standing rate of around US$60 per barrel.
There will now be much hope for the country to progress.
The sudden rise in oil prices seems a replay of events 30 years ago.
Before September 2003, the inflation-adjusted price of a barrel of crude oil was generally under US$25 per barrel.
During 2003, the price rose above US$30, and reached US$60 by August 11, 2005, and peaked at US$147.30 in July 2008.
Commentators at that time attributed these price increases to many factors, including reports from the United States Department of Energy and others showing a decline in petroleum reserves, worries over peak oil Middle East tension, and oil price speculation.
Now market analysts say that global oil consumption is expected to rise to a record level next year, according to the Paris-based International Energy Agency and other forecasters.
Saudi Arabian Oil Minister Ali al-Naimi said in Quito on Dec 11 that oil at US$70 to US$80 a barrel is a good price, that the market is stable and supply and demand are in balance, while Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said then that he was satisfied with prices near US$90.
Qatar's Oil Minister Abdullah bin Hamad al-Attiyah has said that oil around the US$80 region was best for producers and consumers. Algerian Oil Minister Youcef Yousfi said at a conference in Doha on December 1 that the market is in a "normal situation" and prices are likely to be stable for months.
Some Wall Street strategists expect prices will return to US$100 for the first time in two years during 2011 amid rising global demand, including Goldman Sachs Group Inc, Morgan Stanley, JPMorgan Chase & Co and Bank of America Merrill Lynch.
The Dow Jones industrial average and the S&P 500 index both rose Wednesday to their highest levels since July 2008 after the Commerce Department said the US economy rose in the third quarter at an annual rate of 2.6 per cent, a slight increase from its earlier estimate.
"The price of crude is highly connected to the direction of the equities markets and confidence in a global recovery," Sander Capital Advisors said in a report.
"When equities go up, it tends to mean confidence is up and thus consumption is up." -- Courtesy of Borneo Bulletin
