Russian Ministry of Economic Development predicts oil at $38 per barrel, dollar at 70 rubles

Russian Ministry of Economic Development predicts oil at $38 per barrel, dollar at 70 rubles

Russian Ministry of Economic Development predicts oil at $38 per barrel, dollar at 70 ruble

According to a new forecast of the Russian Ministry of Economic Development, the oil price at the end of 2015 will be $38 per barrel, and the dollar will increase to 70 rubles.

The document is titled 'Basic parameters of socio-economic development for 2016-2018'.

The main difference between the latest version of the forecast from the one released last month is that the oil price was predicted to grow from $52 per barrel in 2015 to $55 in 2016 and $60 in 2017. In the new document, the price of "black gold" in 2015-2016 is set at $50 per barrel to increase to $55 in 2017 and $60 in 2018.

But oil prices in August were defined when they had not yet hit the "bottom", so they predict the ruble's exchange rate against the dollar at 70 rubles until the end of the year and $38.7 per barrel of oil.

The deputy chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, told Vestnik Kavkaza that "the deterioration of forecasts is obviously influenced by the situation with Iran, because they will remove the sanctions against Tehran soon, and consequently it will receive the ability to export its oil."

"Of course, it is aldo about external payments, which will be carried out by our companies in the autumn. This will increase the pressure on the exchange rate, the demand for currency on the part of the company increases to pay internal debts. We also have a forecast that the US Federal Reserve will raise its interest rate. This will also influence the strengthening of the dollar against other currencies. And oil is also a currency," he added.

The pessimistic forecast may be due to China's economic difficulties.

"But there are factors that affect the process in the opposite direction. Firstly, oil prices have dropped quite low, and it becomes below cost for a number of manufacturers. Accordingly, they will curtail their production. And curtailing of production reduces oil supplies," Aksakov stressed.

"As for the Federal Reserve System, many believe that such a decision will not be accepted," he said.

"In general, I believe that those and other factors are offsetting each other, and the ruble exchange rate will be within the limits in which it is now, and the price of oil too," Anatoly Aksakov concluded.

A leading researcher at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economics and Public Administration, Alexander Abramov, in his turn, said that "trying to guess oil prices is not a very rewarding thing."

"The main thing that we can say is that an oil price of $38 per barrel is unfounded. It's just a subjective assumption of the Ministry of Economic Development," he suggested.

"If the price of oil is too low, it gives an opportunity to place unpredictable incomes into the budget. The price of the ruble, as I think, is determined randomly in this case. The Ministry of the Economic Development is driven by a desire to make a more conservative forecast to create a better feeling in the budget," Alexander Abramov noted.