AFP/Kuwait City

Kuwait's ruler warned on Tuesday that a decline in oil prices was damaging the economy of the energy-rich Gulf state, urging lawmakers to "stop squandering resources" and to diversify revenues.

"We are witnessing a new cycle of low oil prices as a result of economic and political factors that have hit the global economy and started to negatively impact our national economy," Sheikh Sabah al-Ahmad Al-Sabah said in a speech to open the new parliamentary term.

The emir called on the government and parliament to "safeguard our oil and fiscal wealth".

"You have the responsibility to stop squandering resources, rationalise spending and direct subsidies to reach those who need it... without impacting the standard of living," he said.

He also called for stepping up plans to reduce Kuwait's dependence on oil revenues by diversifying the economy.

"I have repeatedly called ... for establishing productive economic activities to create jobs for youth, diversify the resources of income of the country and reduce national economic dependence on oil," he said.

Oil prices have lost more than a quarter of their value since June, hitting the state coffers of energy-dependent countries like Kuwait.

Oil income accounts for about 94% of Kuwaiti revenues. But the oil-rich emirate has piled up massive fiscal reserves of more than $500bn during the past 15 years due to high oil prices.

Earlier this month, Kuwait began reducing public subsidies, estimated at $18bn, on diesel, kerosene and aviation fuel. It is considering similar measures for electricity, water and petrol.

Public spending has risen more than three-fold in Kuwait over the past seven years, with the overwhelming majority of the increase going to wages and subsidies.

The emirate has a native population of 1.25mn and is also home to about 2.8mn foreigners.

Brent oil steadies below $86

Reuters/London

Brent crude oil steadied below $86 a barrel on Tuesday, after dipping close to $85 earlier in the day, as a falling US dollar provided support against weak demand and abundant supply.

The US dollar slipped late on Monday after data revealed the US services sector in October grew at its slowest rate since April.

A weaker dollar helps global consumers buy dollar-denominated commodities such as oil.

But Chinese data on Tuesday showed profits in the industrial sector had slipped in the first nine months of 2014, reinforcing signs of a slowdown in the world's largest oil importer.

"We see the market being fairly stable this week, and I think we are within $5 of a longer-term floor" said Olivier Jakob, an oil analyst at Petromatrix.

Brent crude for December was down 20 cents at $85.63 a barrel by 0935 GMT. US December crude was down 10 cents at $80.90 a barrel.