World oil prices likely to stay at $80-90 per barrel

World oil prices could plunge to $50 per barrel amid the ongoing global financial crisis but are likely to stabilize at $80-90 per barrel, a senior Russian government official said on Tuesday.

"The options of oil prices falling to $50 per barrel are being discussed. However, we [the Economic Development Ministry] consider real prices to be $80-90 per barrel," Andrei Klepach, deputy economic development minister said.

World oil prices plunged to below $90 per barrel Monday to $87.81 on fears of declining demand for crude.

Russian Finance Minister Alexei Kudrin said the 2008 budget would remain balanced with oil prices ranging from $60 to $70 per barrel. Next year, the federal budget will be deficit-free with oil prices at a level of $70 per barrel.

The draft federal budget for 2009-2011 is based on an average yearly oil price of $95 per barrel in 2009, $90 per barrel in 2010, and $88 per barrel in 2011. Inflation is expected to hit 7.5-8.5% in 2009, 5.5-7% in 2010, and 5-6.8% in 2011, Kudrin said.

Klepach also said that his ministry did not expect the ruble to fall considerably against the greenback.

The Bank of Russia set the official ruble/dollar rate at 26.1784 rubles to the dollar from October 7 down 27.91 kopeks from October 4.

"We do not expect any sharp decrease in the ruble exchange rate," Klepach said.

Source: RIA Novosti

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