As Ruble Tumbles, Russian Minister Says Budget Needs Rethink

Russian Energy Minister Aleksandr Novak has said the falling price of oil on world markets necessitates adjustments in Russia's 2015 state budget.

Novak told reporters on November 28 the budget's assumed benchmark price of crude oil at $100 per barrel would have to be changed by the Ministry of Economic Development.

Novak said the average price of oil would still amount to $98 or $99 per barrel this year due to high prices in the first half of 2014.

He said the situation was predictable and "absolutely not critical" and forecast the price per barrel would rise in the medium term to between $85 and $90.

Igor Sechin, the head of Russia's biggest oil company, Rosneft, dismissed worries about falling oil prices having a dire effect on his company.

Sechin said on November 28 that "even the worst-case scenario of an oil price of below $60 per barrel will not be dramatic for Rosneft."

OPEC announced late on November 27 that the oil cartel would not cut production and would not meet again to discuss prices until June.

The announcement sent the price of oil tumbling to a four-year low of around $70 per barrel.

The announcement also sent the Russian ruble -- which is also under pressure as Russia's economy slows and Western sanctions over Moscow's actions in neighboring Ukraine bite -- lower to the U.S. dollar and euro.

The ruble dropped to over 50 against the U.S. dollar late on November 28.

The ruble dropped to 62.03 against the euro in early trading recovering to 61.41 by the close of the day.

Russian news agency Interfax quoted economists at Russia's Sberbank as predicting if the U.S. dollar reached 50 rubles it would prompt an intervention from Russia's central bank.

Those economists said it was unavoidable now that the U.S. dollar would cross the 50-ruble mark and if the price of oil dropped to $65 per barrel the rate would be 55 rubles to the U.S. dollar.

Based on reporting by Reuters, TASS, and Interfax