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Wed 9 Oct 2019 03:16 PM

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Russia forecasts oil price of $50 'in the medium term'

The forecast is below the current market price for oil which has been volatile as worries about supply have been counterbalanced by concerns over a slowing world economy

Russia forecasts oil price of $50 'in the medium term'
Russian Energy Minister Alexander Novak

Russia, one of the world's biggest energy producers, is basing its economic forecasting on an oil price of $50 per barrel, Energy Minister Alexander Novak said Tuesday.

"We believe that in the medium term, oil prices will be around $50," Novak said in an interview with Rossiya 24 state television, adding this was a "conservative scenario".

"Our forecast of (Russia's) socio-economic development is based on this price," he said.

The forecast is below the current market price for oil which has been volatile as worries about supply have been counterbalanced by concerns over a slowing world economy.

On Tuesday WTI, the US benchmark, traded at around $52 while its European counterpart, Brent, stood at just over $58.

Russia's budget for the current year was based on an price of around $42 per barrel, the lowest in about a decade, according to Bloomberg.

Export of oil and natural gas are two major sources of revenue for Russia which has, however, been trying to diversify the economy.

Russia has been cooperating with OPEC, of which it is not a member, to limit production with a view to engineering an oil price rebound after sharp drops seen in 2014-2015.

In mid-September energy markets briefly soared following attacks on oil infrastructure in Saudi Arabia, but dropped off again amid unease about the global economic outlook.

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