Russia Says Oil Price Fall Likely to Continue

MOSCOW--Russia's finance ministry on Thursday said it now looks like a "moderately optimistic scenario" for oil prices to stay around $80 a barrel, following the decision by the Organization of the Petroleum Exporting Countries to leave oil production unchanged.

"In the past several days we have observed that an absence of determination to limit volumes of extraction by OPEC has led to a further negative pressure on oil prices. The market remains in a condition of oversupply and the current [OPEC] decision means that the issue won't be solved quickly," said Maxim Oreshkin, head of strategic planning department at the finance ministry.

Mr. Oreshkin, responsible for long-term budget planning, said Russia will need to adopt to new oil prices. The sharp falls in the price of oil poses a challenge for Russia, which based its budget for 2015 at an average oil price of $100 per barrel.

The finance ministry said earlier this week that if oil prices remain at their current low level and Russia's economy fails to pick up, budget revenue may fall short by a trillion rubles ($21 billion) next year.

Russia is the world's third-largest oil producer and its economy is heavily dependent on oil exports, with the sale of hydrocarbons accounting for about a half of its annual budget revenue.

Write to Andrey Ostroukh at [e-mail]

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