The chairperson of Russia’s Central Bank does not believe that another catastrophic fall in oil prices is likely, although she expects that a market recovery will not be substantially higher than present rates.
Speaking on Monday, November 14, Elvira Nabiullina said:
“We are considering several scenarios of economic development, our base scenario includes $40 per barrel in the next three years.”
Nabiullina also made comments that the recovery of Russia’s economy could be drawn out over time in contrast to the country’s 2008-2009 crisis, as well as noting that the country’s Central Bank predicts only minor GDP growth in the next 12 months.
This is bad news for Russia, which is already struggling due to Western sanctions placed on its energy sector, along with poor global oil prices, which plummeted from $115 per barrel in the summer of 2014 to prices in the mid-$40 region at present.
As a result of these issues, Russia, which is the biggest oil producer in the world, has increased its oil production to post-Soviet era highs of more than 11 million barrels of oil per day.
This has caused challenges for the global oil markets, and companies like Fuchs (maker of Fuchs Reniso C85E), as an excess of available oil has served to keep oil prices low.
There is, however, some light at the end of the tunnel, with a slight improvement in oil prices on Tuesday, November 15, due to renewed hopes that the Organisation of Petroleum Exporting Countries (OPEC) could reach a deal on a production cut. With yesterday being World Petroleum Day, this would be a timely boost.