Chairperson of Russia’s Central Bank Elvira Nabiullina said on Monday the probability of another drastic collapse in oil prices is low, though recovery won’t be substantially above current rates.
She also said that recovery of the Russian economy may be stretched over time as distinct from [the] 2008-2009 crisis and the Central Bank expects minor growth of GDP in the next year.
Nabiullina forecast is dour news for Russia as it battles twin problems of western sanctions placed against its energy sector over Russia’s 2014 annexation of Crimea, and low global oil prices which have dropped from $115 per barrel in mid-summer 2014 to now trading in the mid-$40s range.
In response, Russia – the world’s largest oil producer – has ramped up oil production to post-Soviet highs of 11 million barrels per day. The country’s historic high oil output has been matched in lockstep by Saudi Arabia, the world’s largest oil exporter and second largest oil producer, who also increased oil output to record highs in July.
Record oil output and historically high oil inventory levels have largely been responsible for the more than two-year roil in global oil markets, which can arguably be called the worst oil market crash in a generation.
However, oil prices did trend up slightly on Tuesday amid fresh hope that OEPC could reach an oil production cut a its meeting in Vienna later this month and reports that U.S. shale oil production had fallen.
Rebounding from their lowest point in almost two months the previous trading session, U.S. crude futures for December delivery had climbed 90 cents, 2.1%, to $44.22/barrel by 0746 GMT. Brent futures were up 71 cents, or 1.6%, at $45.14 per barrel.