Oil prices could drop to $40 per barrel: Russia
MOSCOW, 19 days ago
Oil prices are expected to decline to $40 per barrel and stay at that level after that, media sources quoted the Russian Minister of Economic Development as saying.
"The basic precondition from the standpoint of oil price is that oil prices will drop to $40 per barrel in this year and remain at the level of $40 per barrel after that," Maxim Oreshkin was quoted in a TASS report.
"The average annual oil price under the base case and the target scenarios is $45.6 per barrel in 2017, $40.8 per barrel in 2018, $41.6 a barrel in 2019, and $42.4 per barrel in 2020," the minister added.
The national currency is expected to weaken in current months to 63-64 rubles a dollar, according to Oreshkin.
"According to our estimates, if the rate does not return to model values, an extra capital inflow of $18 billion will be required to maintain stability of the forex market and to keep such rate the capital inflow should be over $10 billion in general over the year. This is not a base case scenario for us and we therefore expect significant ruble weakening in current months," Oreshkin said.
“Time now is favourable for population to buy foreign currency. We fundamentally believe that the current moment is highly beneficial for foreign exchange purchases by importers and population preparing for overseas trips," Oreshkin added.
The ministry predicts the dollar to be equal to 68 rubles at the turn of 2017 and 70.8 rubles by 2018 year-end in its base case macroeconomic scenario, the report said.