Macroeconomic factors to work against oil prices in 2014 – Klepach

(Interfax – MOSCOW, October 16, 2013) Macroeconomic factors will work to push oil prices down next year, Deputy Economic Development Minister Andrei Klepach said during a meeting the State Duma budget committee.

Klepach said that that, in the forecast for Russia’s socioeconomic development in 2014-2016, there is built in the hypothesis “that the rather high oil prices we are seeing this year and which are higher than [the prices] built into the budget a year ago will come down and further on stabilize at around $100 per barrel.” This is the conservative scenario, because now prices are higher, and we separately considered in the forecast materials what will be with the economy if prices hold at a higher level of around $113 a barrel with future growth to $120 a barrel,” he said.

“Nevertheless, the base forecast is conservative, around $100 [$101 in 2014, and $100 in 2015 and 2016]. Because we are proceeding from macroeconomic factors working to lower oil prices. The higher current prices are to a larger degree a result of political risks than the demand situation and availability of oil,” Klepach said.