By Vestnik Kavkaza
The World Bank decreased its forecast for the Russian economy in 2015-2016. Instead of stagnation, WB experts forecast recession for 2015. According to the BBC, which cites the World Bank, continuing falls in oil prices and inaccessibility of international financial markets to Russian companies due to sanctions will lead to a reduction in investments and a decrease in internal consumer demand. The basic scenario requires that the average oil price will be $78 per barrel in 2015, $80 in 2016.
However Gennady Shmal, the president of the Russian Union of Oil and Gas Producers, told Vestnik Kavkaza: “Oil prices have always been highly volatile. So I believe that over time it will come full circle. In the current situation the fair price is $80 per barrel. $90 is a very comfortable price; $100 is a blessing of God.”
Shmal thinks that by the middle of 2015 the prices will return to the level of $80-85. “Today shale oil is quite pricey. There is extraction of oil from Canadian sands; there is oil extracted from shelves, including deep-water ones. This oil is quite expensive. I think prices will soon return to the level of $80.”
Meanwhile, Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs, told Vestnik Kavkaza that “not long ago, no one believed that oil prices could fall below $80. At the moment many people think that it will not fall below $60. Not everyone understands the causes of the high volatility in the oil market. It applies to the course of the ruble to the same extent. On the one hand, there is the influence of external circumstances and we do not know what they are going to be. On the other hand, there is the influence of speculation on the currency market. But, nevertheless, we must draw conclusions not only from such fundamental reasons as external influences and changes in the policy of the Central Bank and, perhaps, the incorrect actions of currency dealers, but also from the predictability of economic policy. The more predictable the economic policy is, the greater is the desire to make money not on external factors and fluctuations of the foreign exchange market, but to invest in the production and expect returns on these investments.”
