Ministry Forecasts $74 for Urals in 2008

The Economic Development and Trade Ministry increased its forecast for this year's average price of Urals blend crude to $74 per barrel and $62 per barrel by 2010, national media reported Monday.

Higher oil prices will "greatly increase" budget revenue, Andrei Klepach, who head's the ministry's macroeconomic forecast department, was cited by RIA-Novosti as saying.

"The dynamics of world prices for oil are pointing considerably higher up, and, despite all the uncertainty and all the risks, we expect that even up to [2010] oil prices will be higher than those included in the budget and in the forecast approved in April," Klepach said, Interfax reported. The previous forecast was for $53 a barrel, Klepach said after the Cabinet's budgetary planning committee meeting.

Oil fell below $90 per barrel Monday as data on weak U.S. home sales added to recession concerns in the world's top consumer.

According to Finance Ministry data, the average prices of Urals crude in 2007 was $69.29, which surpassed the figure for 2006 by $8.20, RIA-Novosti said.

Klepach said the ministry presented changes to the expected course of the economy's development in 2008 and for the period up until 2010 that suggested a marked improvement in macroeconomic factors and higher-than-expected inflows into the budget, RIA-Novosti reported.

MT, Bloomberg, Reuters