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Ex-Finance Minister Kudrin says oil price may slide below $55 per barrel in year’s time

February 28, 17:31 UTC+3

Kudrin also said that the measures to support global crude prices will be effective for about a year

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© Viktor Drachev/TASS

SOCHI, February 28. /TASS/. Head of Russia’s Center for Strategic Research (CSR) and ex-Finance Minister Alexey Kudrin says the oil price is likely to slide below $55 per barrel in a year’s time

"I’ve repeatedly said that the oil price will be hovering between $40 and $60 per barrel. Given the recent initiatives on the market I expect the (oil) price to be close to $55-56 per barrel within half a year, though it may still go down in about a year's time," he said in an interview with TASS.

According to Russian Finance Ministry’s main debt policy guidelines for 2017-2019, crude prices will hover between $40-60 per barrel in the next three years.

The World Bank expects the average oil price to be around $55 per barrel in 2017.

Kudrin also said that the measures to support global crude prices will be effective for about a year, while whether they will remain effective afterwards depends on a variety of factors.

In end-2016, OPEC and non-OPEC countries reached an agreement on joint reduction of oil output to the level of 32.5 mln barrels per day. This was the first agreement reached since 2008, that pushed crude prices up. The total crude oil production cut will amount to 1.7-1.8 mln barrels per day in the first half of this year.

Russia may replenish its Reserve Fund 

Kudrin said that Russia will manage to keep its Reserve Fund and National Wealth Fund at least on its present level in the next three years and may even replenish them.

"I think that now the National Wealth Fund won’t be intensively spent now because the government needs a reserve in case of serious decline in oil prices and for some new projects. This also concerns the Reserve Fund, due to the oil price. The oil price has reached this level and we have an understanding that the reserve fund will be at least maintained, and may even grow," Kudrin said.

He also noted that the government and the president believe that the state needs a good Reserve Fund.

"It saved us during every crisis, and we understand that crises may happen in the future. That is why they will keep it and will not spend it," Kudrin said.

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