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Russia’s former finance minister warns oil may briefly drop to 20 dpb

February 21, 2015, 3:18 UTC+3 MAKHKACHKALA

Kudrin believes there are very many factors that keep putting downward pressures on oil prices

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Aleksey Kudrin

Aleksey Kudrin

© Vyacheslav Prokofyev/TASS

MAKHKACHKALA, February 21. /TASS/. Russia’s former finance minister, Aleksey Kudrin, does not rule out a brief drop in crude oil prices to 20 dollars per barrel.

In Friday’s trading on the London Intercontinental Exchange a barrel of Brent was trading at 60.41 dollars before the close. In January, Brent blend prices dropped as low as 48 dollar per barrel and even lower.

"I cannot rule out that at a certain point, for a very brief period, the price of oil may slump to 20 dollars," Kudrin told the media in Makhachkala on Friday. "I do not think most analysts agree this may last a while. At the moment the assumption is oil prices will be somewhere between 60 and 80 dollars per barrel this year. That the price is now back to 60 dollars says nothing at all. It may turn either way."

Kudrin believes there are very many factors that keep putting downward pressures on oil prices.

"For two or three year we shall see the world getting used to new prices and businesses evaluating the new opportunities. The world will realize at last what is the long-term price everybody will be prepared to agree to," Kudrin said.

The Russian government hopes that the oil price will stabilize at the current level, he recalled.

"Whenever I am asked for an opinion, I say that future prices are anyone’s guess. They may stay at 40 dollars per barrel for a long time, or they may be at 80 dollars," he concluded.

Earlier, Deputy Prime Minster Dmitry Medvedev said that in proposing adjustments to the budget the Cabinet of Ministers would proceed from a forecast price of 50 dollars per barrel. In that case the federal budget’s deficit will make up 3.8% of the GDP.

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