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Alaska officials expect lower oil prices to increase deficit

New Oil Field Discovery in the North Slope
New Oil Field Discovery in the North Slope(KTUU)
Published: Mar. 16, 2020 at 6:39 AM AKDT
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Alaska officials say a drop in global oil prices will likely add $300 million to the state's current year budget deficit.

The Alaska Journal of Commerce reported the state Legislative Finance Division told lawmakers the state could experience a $600 million revenue reduction in the 2021 fiscal year starting July 1.

Officials say oil price forecasts in the range of $60 per barrel now appear optimistic.

Prices began falling in early February as traders reacted to lower demand forecasts from China due to the country’s reaction to the outbreak of the COVID-19 virus.