Oil prices may decline from a “somewhat artificial” level as governments reduce stimulus spending, Finance Minister Alexei Kudrin said Friday.
The current price is favorable for Russia and acceptable to the world, Kudrin told reporters in Yalta, Ukraine.
“I think at some point the price may go down,” Kudrin said. “The price may decline if steady economic growth doesn’t resume” by the time that governments roll back anti-crisis measures and central banks cut rates.
Russia, the world’s largest oil and gas producer, depends on energy sales for about 70 percent of its export revenue. Urals crude, the country’s benchmark export blend, has rebounded 82 percent from the start of the year, to average $76.40 a barrel this month. That is about half of the July 2008 record high.
Oil prices in excess of government estimates will help narrow this year’s budget deficit and enable the government to maintain stimulus spending, Kudrin said Oct. 21. Russia’s 2010 budget deficit outlook assumes that crude will average $58 a barrel and rise to $60 in 2012.
Russia should avoid a sudden removal of stimulus measures to support the domestic economy, the Organization for Economic Cooperation and Development said in a report Thursday. The economy will probably expand 4.9 percent in 2010, while output will contract 8.7 percent this year, it said.
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