MOSCOW, Nov. 3 (UPI) -- In a potential blow to a weakened Russian economy, the head of the Russian Central Bank said there may be a sustained slump in crude oil prices.
A price of around $45 per barrel for the global benchmark, Brent, is about 45 percent lower than this date in 2014 and about 20 percent below the start of 2015. Weak global economic growth and increases in crude oil production means markets favor the supply side, pushing prices lower.
Russian Central Bank Chief Elvira Nabiullina said there may be a prolonged downturn ahead.
"The oil market is being structurally transformed, which demonstrates that oil prices may stay low for a long period of time," she said.
In September, the bank's Board of Directors said it was keeping the key rate at 11 percent annually because of higher inflationary risks and "persistent risks of considerable economic cooling" in Russia.
The nation's economy teetered on the brink of recession when entering fiscal year 2015. The Russian currency, the ruble, has been pressured by a weak economy in general and sanctions targeting the Russian energy sector.
Russia's economy depends heavily on oil and natural gas for revenue. With energy prices moving lower, the International Monetary Fund warned Russia's economy could shrink by as much as 3.8 percent in part because of falling oil prices.
Nabiullina said the IMF's forecast was in line, but slightly more pessimistic, than the bank expects. Economic factors like inflation, she added, were influenced by short-term forces, not long-term trends.
Last month, Russian President Vladimir Putin said the nation's economy had reached "the peak of the crisis." The Kremlin said Tuesday it expected the economy will bottom out at some point during the fourth quarter.
