July 3 (Bloomberg) -- Dmitry Medvedev, the president of Russia, the world's second-biggest oil producer, expects prices to rise to $150 a barrel and retard global growth.

``Oil prices will reach $150 a barrel,'' Medvedev said in a meeting with reporters in Moscow ahead of his participation in a summit of the Group of Eight industrial countries in Japan on July 7-9. ``Unfortunately, rising oil prices create problems for the world's economy.''

Russia is in its 10th year of economic growth, boosted by record oil prices that doubled in the past year to record highs. Gross domestic product expanded by 8.5 percent in the first quarter, the second fastest pace since 2000.

``It's odd for any politician to be talking the market up, but they are a big exporter so it's in his interest,'' said Tony Regan, an energy consultant with Nexant Inc. in Singapore. ``It's also saying that `you can't take me for granted.' The G-8 meeting will have a lot of leaders interested in bringing the oil price down but he won't necessarily agree with that.''

Oil prices have climbed on concerns that future supplies will be unable to meet demand from emerging economies such as China and India. Crude has also gained as the U.S. dollar declines and investors buy commodities to hedge inflation.

Crude oil futures for August delivery in New York rose 87 cents, or 0.6 percent, to a record $144.44 a barrel in after- hours electronic trading today. The contract was at $144.24 a barrel at 12:20 p.m. Singapore time.

Stay High

Medvedev said oil prices will likely stay high.

``This is a reality that everyone has to take into account,'' he said, according to the transcript of the July 1 meeting with reporters released by the Kremlin on July 3.

The Russian president called OPEC's influence ``exaggerated,'' saying the organization's decisions don't always have a ``long-term impact on oil prices.''

He called for talks among oil producers, consumers and those countries that transport oil to markets through pipelines.

Russian oil production declined in June, bringing the nation closer to its first annual drop since 1998. Output fell to 9.77 million barrels a day (or 40 million metric tons a month), 1 percent less than June last year, according to data released by CDU TEK, the dispatch center for the Energy Ministry.

Medvedev said Russia should diversify its economy away from oil.

To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net; Christian Schmollinger in Singapore at Christian.s@bloomberg.net;

Last Updated: July 3, 2008 00:48 EDT