Leaders of the economic bloc of the government discussed providing a balance of the federal budget in 2016 yesterday in Gorky. Premier Dmitry Medvedev reminded that the average oil price in the budget was calculated at $50 per barrel. However, negative dynamics create serious risks for implementation of the budget. According to the Prime Minister, the Central Bank has various instruments for a prompt response. It is important to maintain the positive changes in the economy, which were reached last year, and financing of priority directions which should be a basis for economic growth, as well as to concentrating the resources of the state in industries which have a high potential in the economy in general and in import substitution.
Meanwhile, participants in the 46th Davos World Economic Forum, which closed on January 23rd, had a common view that by the end of the year oil prices would reach $50 per barrel. “At the same time, the short-term situation can vary from 20 to 60 dollars. All the forecasts that, under the current oil price, producers will be lost, turn out to be wrong. It turns out that enterprises can work at a loss. That’s why $27 per barrel is not grounds for bankruptcy. If this price continues for a year, US shale production will probably be reduced by 50-90 percent. It is not like that right now, so it's not so bad,” Sergey Pikin, Director of the Energy Development Fund, says.
According to him, the economic situation in the world hasn’t changed over the past few weeks: “All the concerns about China, which there have been since the beginning of the year, haven’t disappeared. Moreover, we see that there is no drop in US production. However, the prices for WTI and Brent were below 30. America continues to increase production, although the number of drilling rigs is decreasing. That is why all the forecasts are still in a negative trend.”
The expert said that 2015 wasn’t so bad if you look at the reality: “50 dollars per barrel, now it's like manna from heaven. The average price in 2014 was above $90, which is simply unachievable in the current reality. The uncertainty has grown even more, including because of the Chinese factor, which wasn’t playing out so much at the beginning of the year as it is doing today. Iran has been participating in the prices for a long time already, but all forecasts about the cost price are in fact groundless. Everything is relative, and all forecasts are based on the current moment."
However, the Minister of Economic Development of Russia, Alexei Ulyukayev, thinks that “after the first quarter, stabilization of the oil market will begin, and prices will be low for a long time, but they will be much higher than the current prices.” At the same time, the First Deputy Minister of Energy, Alexey Teksler, says that Russia plans to maintain volumes of oil production in 2016 at the level of 2015. “Our forecast is 533-534 million tons this year,” Teksler said. He added that the export volumes would remain at the same level as well: “There will probably be an insignificant growth of exports in comparison with 2015 due to the depth of internal processing.”
