The ruble will strengthen if the summit of the countries-exporters, which will be held this Sunday in Doha, is successful and the parties agree about the freezing of oil production. In this case, the price of a barrel of Brent crude oil could be $45, which corresponds to a price of 65 rubles per dollar, according to analysts Sberbank CIB Tom Levinson, Dmitry Kolomytsyn and Iskander Lutsk. And Iran’s participation in negotiations and the consent of this country to restrict oil production may lead to higher prices up to $50, in this case the dollar rate falls below 65 rubles., according to Sberbank SV.
In his review of analysts note that over a significant strengthening of the Russian currency will prevent a potential rate cut by the Central Bank or even the regulator output to the market to buy the currency and the preservation of investors ‘ expectations about rate hikes by the fed.
“If the Doha negotiations fail, the price of Brent could fall to $35 per barrel or lower, and the dollar will be worth 70-75 rubles. However, we do not expect Brent prices below $30,” — said in the review of Sberbank CIB.
Sunday, 17 April, representatives of producing countries will meet in Doha (Qatar) to discuss the freezing of oil production at the current level. Negotiations may be joined by Iran. According to analysts Sberbank CIB, the probability that Iran will not participate in the dialogue of the countries-exporters is 35%. However, the probability that the exporting country does not agree on production cuts, analysts of Sberbank CIB estimated at 20%. At the same time, the probability of the most optimistic scenario, in which Iran agreed to freeze production to the level of January 2016 (2.9 million barrels), is assessed at 15%.
As said on Wednesday the head of the Russian Ministry of energy Alexander Novak, the parties may agree, and without participation in the negotiations of Iran. According to him, Iran plays a decisive role in these negotiations, there is a chance to sign a contract and without the participation of Iran. Minister of energy of the Russian Federation said that it is impossible to force a country to forcibly join the Pact stop the oil production level.
“Now I don’t want to prematurely comment on what would be discussed on 17 April in Doha. Let’s wait directly consultations”, — said Alexander Novak.
Earlier consent to join the agreement expressed Riyadh, Doha and Caracas. The need for agreements due to the volatility of the international market of black gold. At the beginning of the current year, Iran took most of the sanctions, and he was able to return to the market. Initially, Tehran said that he was ready to accede to the Treaty on freezing the level of oil production, but then, the Iranian side refused.
Wednesday, April 13, the Ministry of energy confirmed the negotiations with Saudi Arabia about the freezing of oil production. This information has caused rising oil prices. On Tuesday, oil gained in price by 3.4%, rising to $of 44.24 per barrel. On Wednesday the price of Brent crude also continued to grow and is now trading in the range of $of 44.24–44,3. As noted by Bloomberg, crude oil futures, which in January 2016 fell to 12-year lows, rose about 30%. The ruble at the auction of the Moscow exchange strengthened: by 14:00 Moscow time the dollar fell by 30 kopecks, to 65.4 rubles.
“If exporters agree on production cuts, we will likely witness a further rally in oil, which would entail a revision in our macroeconomic forecasts and profit forecasts and target prices”, — stated in the overview prepared by analysts of the company “Aton”. The current forecast assumes oil price at $40. The Bank considered that after the Doha meeting, the market is expecting a slight decrease. Crude will trade at $40,5–44,5.
Western analysts are less optimistic about the results of the meeting in Doha. “The most that can be expected is to freeze, which will not reduce sentences and will allow the largest producer countries to keep production at record levels,” says the Bloomberg strategist Julian Lee. According to Citygroup analyst Seth Kleiman, exporters for so long tried to agree that if negotiations fail, it will have an extremely negative impact on prices in the oil market. “They probably understand this very well”, — quotes its words Bloomberg. At Goldman Sachs predict that the Doha agreement will not change the balance in the oil market: the market may show a specific dynamic in case of change of the data about oil stocks in the United States. “The most likely outcome of the meeting was “soft agreement” without specifics, which will change little in the current situation in the oil market”, — said in an interview with Bloomberg Television, head of commodities research at Goldman Sachs Jeff Currie.
At Bank of America Merrill Lynch believe that if exporters agree, it will lead to the reduction of excess oil on the market in the second half by 0.5 million barrels. a day, and in the third quarter of 2016, the market may be a deficit that will push the quotations up to $50 per barrel Brent. If the agreements about the freezing will not be and oil-producing countries will return to the policy of price wars, the price of Brent could fall to $40 a barrel. In any case, given the reduction in U.S. inventories and growing demand in 2017 the average oil will cost not less than $50, according to a review of the Bank.