What factors influence the fall in oil prices
The International Monetary Fund has provided a long-term forecast of the oil market. Analysts told in detail what will happen to “black gold” and what factors influence its value. Oil prices are expected to fall, which will last for about 5 years. According to experts, by 2023 a barrel of rough will be estimated at 55 dollars or less.
A precondition for such disappointing forecasts was the current events. Since February this year, the cost of the resource has decreased by 13% and is 60 dollars. This figure is explained not by an increase in demand for rough, but by various factors. The latter include the situation with supplies from Iran, which are subject to sanctions. In addition, there is a decline in oil production in Venezuela, the volume of which reached a historical minimum. Such events have a tangible impact on commodity quotations on the exchange. But according to IMF experts, next year the cost of a barrel of resource will begin to decline, which will continue until 2023.
Increased production of raw materials in the USA will also lead to lower oil prices. Pipelines are currently being built there, which will connect the field and the eastern coast of the United States. Commissioning of new projects will increase the number of exports.
How the drop in oil prices will hit the Russian economy: forecast
The drop in the cost of oil is a big blow to the Russian economy, where 25-30% of the budget revenues are from the sale of raw materials. The Ministry of Finance already estimates the losses, assuming that the cost of a barrel of hydrocarbons is $10. According to experts, this decline is unlikely for the Urals brand. Next year, the price is expected to be within $42.5.
But if we assume such a scenario of the price drop to 10 dollars within 10 years, then Russia is expecting the following processes.
In the first year of such a price for oil the country’s GDP will drop by about 5%, but if this situation lasts 10 years, then the budget will be undersupplied by about 70%. Russian analysts are in a hurry to assure that such a catastrophic drop is unrealistic. In this case, experts make a forecast in order to theoretically assess the weaknesses of the economy and see how the damage can be reduced. At the same time they also speak about the positive sides of oil cost reduction – stabilization of currency exchange rate and growth of budget in ruble equivalent.
In addition to the global forecast, the Ministry of Economic Development has presented statements for the coming years, which are more in line with reality. According to experts, in 2020, the Urals oil price will fall to $57, and by 2024 – to $53.