Russia plans $40 a barrel oil for next seven years as Saudi showdown intensifies
Russia is battening down the hatches for a Biblical collapse in oil revenues, warning that crude prices could stay as low as $40 a barrel for another seven years.
Maxim Oreshkin, the deputy finance minister, said the country is drawing up plans based on a price band fluctuating between $40 to $60 as far out as 2022, a scenario that would have devastating implications for Opec.
It would also spell disaster for the North Sea producers, Brazils off-shore projects, and heavily indebted Western producers. We will live in a different reality, he told a breakfast forum hosted by Russian newspaper Vedomosti.
The cold blast from Moscow came as US crude plunged to $35.56, pummelled by continuing fall-out from the acrimonious Organisaton of Petrol Exporting Countries meeting last week. Record short positions by hedge funds have amplified the effect.
http://www.telegraph.co.uk/finance/economics/12046185/russia-opec-saudi-arabia-bluff-40-oil-price.html