The government will only recalibrate the 2019 Budget if the average crude oil price dips below US$50 per barrel, said Finance Minister Lim Guan Eng.

The Finance Ministry prepared next year’s budget based on crude oil prices of US$70 per barrel.

Lim said there was no necessity now to recalibrate the budget at present, as the government was looking at average crude oil prices and not daily prices.

"Previously, when oil prices rose from US$52 per barrel to US$72 per barrel, we did not recalibrate the budget, so similarly it has gone down from US$72 per barrel to US$52 per barrel now.

"We will only consider recalibrating the budget if average crude oil price dips below US$50 per barrel," he told reporters after an event in George Town today. 

However, Lim said the market was quite volatile now although analysts are still positive average crude oil prices could reach US$70 per barrel.

"You know nowadays, (US President) Donald Trump says something and it will affect the price (of crude oil).

“For the time being, as long as average prices are still above US$50 per barrel, there is no need to recalibrate, but we will continue to monitor prices and see how (prices move) next year," he added.

Oil prices crashed to new one-year lows last Tuesday, erasing between four and seven percent throughout last week, dragged down by a deepening sense of global economic gloom, as well as fears of an oversupply in the oil market itself.

West Texas Intermediate (WTI) dropped below US$47 per barrel and Brent fell to US$56.

Multiple reasons have been cited for the sudden meltdown.

Rising crude oil inventories and expected increases in shale production were weighing on oil prices but the price crash was accentuated by the broader sell-off in financials.

- Bernama