A surge in oil prices to their highest average of around $109 a barrel this year will add a whopping $305 billion to the economies of Gulf hydrocarbon producers while their current account surplus will also hit a record high. Projections by a key Western financial centre showed the bulk of the increase in their nominal GDP of the six-nation Gulf Cooperation Council (GCC) will be in the hydrocarbon sector due to high prices and production by members. From around $1,075 billion in 2010, the GCC's combined GDP will climb to nearly $1,380 billion in current prices this year, its highest ever level and far above the previous peak GDP of $1,138 billion in 2008. The report by the Washington-based Institute for International Finance (IIF) showed the surge this year would be a result of a record high oil price of $109 a barrel, breaking the previous record price of $98 in 2008. Crude production by the six members, including the oil heavyweights Saudi Arabia, Kuwait and the UAE, is also expected to soar by about 1.2 million barrels per day to 16.4 million bpd in 2011 from 15.2m bpd in 2010. A breakdown showed the GCC's oil sector would swell to nearly $738 billion this year from $494 billion in 2010 while the non-hydrocarbon sector is expected to expand to $642 billion from around $581 billion. Real GDP is forecast to grow by 6.7 percent, including a10.8 percent rise in the oil sector and 4.2 percent in the non-hydrocarbon economy. The IIF forecast the private sector to grow by 3.7 percent and the public sector by 5.3 percent. The report expected oil prices to recede to an average $97 in 2012 but saw an increase of 400,000 bpd in the GCC's crude output. It said the rise in output would offset the price drop and keep the group's nominal GDP at as high as $1,378bn in 2012, just $2 billion below the 2011 expected level. It estimated the GCC's gas production would grow from 5.4 billion cubic meters a day in 2010 to 6.3 bcm per day in 2011 and 6.6 bcm a day in 2012. Qatar, the world's third largest gas power, will pump 2.5 bcm a day during 2011-2012. IIF estimated the GCC's foreign assets at around $1,513 billion and expected them to soar to $1,708 billion in 2011 and $1,869 billion in 2012. It showed the oil price surge would push the alliance's current account surplus to an all time high of around $293bn this year compared with $151 billion in 2010. The surplus is projected to fall back to nearly $213 billion in 2012. The six members sit atop more than 40 percent of the world's extractable oil resources and 20 percent of the global gas deposits.
