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Central Bank Chief says OPEC deal makes scenario with oil price growth more feasible

Russia's Central Bank says it maintains conservative approach to forming macroeconomic forecast, despite improving situation on oil market

MOSCOW, December 16. /TASS/. Russia’s Central Bank does not expect an excessive strengthening of the ruble amid the decision of OPEC decisions and a number of countries outside the cartel to cut oil production, head of the Central Bank Elvira Nabiullina told a press conference.

"No, we do not expect such a strengthening of the ruble, that would carry risks for financial stability," she said, adding that the OPEC agreement will still have impact on inflation in Russia in coming months but this impact will gradually weaken.

The results of the presidential election in the United States and the agreement of OPEC to cut oil production have increased the likelihood of the scenario with higher oil prices, head of Russia’s Central Bank stressed.

"Two significant world events influenced the situation on the global markets in recent months. It is the results of the US elections and the signing of agreements by OPEC and other exporters to restrict oil production. The assessment of impact of these events allows us to speak about higher likelihood of the scenario with the increase in oil prices," she said.

Nabiullina noted that the Central Bank still retains a conservative approach towards making forecast on oil prices and sets the average annual price of Urals brand oil $40 per barrel for "the entire forecast period."

"We need time to assess the impact of various factors on the situation on the oil market: to what extend the agreement on limitation of oil supplies will be observed, how suppliers from other countries and shale oil producers will act and what the dynamics of global demand and the US Federal Reserve policy will be," she said.

Scenario with oil prices at $25 per barrel in 2017 unlikely, according to the bank.