Within three days, the price of North sea Brent crude oil repeatedly breached the psychological threshold of $ 30. Changes in the oil market had an impact on the rouble exchange rate and dynamics of the Russian stock exchanges.
MOSCOW, 15 Jan. The first working week of the new, 2016 was unhappy for the Russian economy: global oil prices took another dive, and a corresponding impact on the rouble exchange rate and dynamics of the Russian stock exchanges. Russian officials have already stated that this year’s budget will have to be reviewed based on new realities.
If at the beginning of the week the North sea Brent oil cost 33,35 USD per barrel in the past three days, she repeatedly broke down the psychological barrier of $ 30. Only on the basis of one day this week dynamics of quotations was positive.
On the back of strong price volatility of the oil market is especially sensitive to the news from the producing countries. So, on Tuesday in the media appeared the statement of the President of OPEC Emmanuel IBE Cacique on the possible convening in early March, an emergency meeting of the organization to discuss the situation with the prices. The market immediately reacted to this news and moved on to growth.
However, to maintain a stable positive dynamics that is not enough. Moreover, immediately appeared and negativity. So, the UAE energy Minister Suhail al mazrouei stated that the strategy of OPEC in the world oil market is justified, and no “artificial actions” is not required.
Another negative factor was the revision of the forecasts of the world’s largest banks on oil prices. On Monday its forecasts, in particular, has reduced Barclays, Bank of America Merrill Lynch and Societe Generale. Now they expect the price of oil this year in the range of 37-46 dollars per barrel. The most pessimistic forecast was made, the British Standard Chartered: analysts say prices could fall to $ 10 per barrel.
Russian economists and experts also did not Express much optimism. In particular, the head of Sberbank and former Minister of economy of the Russian Federation Herman Gref believes that oil prices can fall to 25 dollars per barrel. In this case, the dollar may reach 80 rubles. However, currently the Minister of economic development Alexei Ulyukayev believes that low oil prices will remain for a long time.
The Ministry of Finance of the Russian Federation, in turn, proposes to adjust the budget in 2016 based on the average price of Russian export oil Urals in $ 40 per barrel. Now based on the Urals price of $ 50. Premier Dmitry Medvedev has proposed to revise the approach to forecasting oil prices in the budget and lay the document is not a specific figure, but a price band, if possible, narrowing.
What are the reasons?
The majority of market participants, analysts and experts agree that the main reason for the fall in oil prices, ongoing since the summer of 2014, is a glut on the world market. At the beginning of 2016, when Brent crude continues to hit record lows over the past 12 years, analysts and other financial factors, primarily the strengthening of the dollar.
In particular, Morgan Stanley analyst Adam long son believes that the excess of supply over demand could bring down the price to 60 dollars per barrel, but further decline is mainly due to the dollar. Further strengthening of the dollar against the Chinese yuan devaluation may lower the price to 20-25 dollars per barrel of Brent, according to the Bank.
On financial factors of decrease in oil prices up to 30 dollars per barrel were talking this week and the Minister of energy Alexander Novak.
“The strengthening of the dollar always contributes to the decline in commodity prices… the Devaluation of the yuan in China is another factor… Additional factors to restore the balance of supply and demand contributed to lower prices for commodities, gives grounds to say that it’s a pretty long-term trend,” said Novak on Friday in an interview with RBC.