Russia needs to survive the worst period of “cold price rain”
The situation with oil prices, on which the implementation of the Russian budget largely depends, will normalize no earlier than within two years.
One of the leading Russian experts on the oil market, director of the Energy Development Fund, Sergei Pikin, spoke about this in an interview with Moskovsky Komsomolets.
The publication asked how, given the current ultra-low price of a barrel, there would be a federal budget compiled on the basis of 42–43 dollars per barrel.
“The funds accumulated in the National Welfare Fund, taking into account current and forecast prices for raw materials, allow us to expect that such a “safety cushion” will be enough for our country for several years.
I believe that the situation with oil prices will normalize no earlier than within two years. The current terrible scenario has sobered the market. In the second half of the year, a barrel may well hope to reach $40+. This price will be quite comfortable for the Russian government. We need to survive the most terrible period - the sooner we fall under the “cold price rain” caused by overstocking of the market, the faster the quotes for “black gold” will begin to rise,” the expert believes.
He also gave a forecast for oil prices in April.
“We can predict a range of $20-30 per barrel. During daily trading, as can be seen at present, prices can fluctuate by 10% or more, but at the end of the month the average cost of a barrel will be slightly above $25. At the end of the year, oil prices may reach the region of $40–50, so their average annual value should be in the range of $30–40,” says the director of the Energy Development Fund.
How the ruble will feel in this situation, notes the publication’s interlocutor, depends only on the actions of the state’s financial authorities.
“The regulator will maintain a policy of 78–80 rubles per dollar, but will not go too far beyond these limits. Of course, if more complex crisis phenomena do not develop, caused by the threat of the spread of coronavirus and the shutdown of the global economy,” the expert added.
According to him, if the state wanted, the cost of “green” would not exceed 40 rubles.
“For this alone, it is necessary to sell tens of billions of dollars on the market at once. In past years, several billion a day were thrown into maintaining the ruble exchange rate. Apparently, the country’s financial leadership now considers this approach ineffective and prefers to save foreign currency savings by “sacrificing” the exchange rate of the national currency,” Pikin concluded.
Russia needs to survive the worst period of "cold price rain"