Only a few days left when the collapse of the OPEC deal+ between major oil-producing countries. As you know, the main initiators of the deal — Saudi Arabia and Russia — failed to agree on the extension of OPEC+ after the first of April. And although oil prices after two weeks of shock temporarily stabilized, probably in early April, waiting for them again galloping growth.
This will be another factor of the “perfect storm” in which the Russian economy is the fault of the coronavirus and losers negotiators who failed to reach agreement with Saudi Arabia.
What will be the price of oil and the ruble in a few days, the “Free press” has learned from our resident experts.
The dollar again will rise in price up to 82 rubles
— In April on the market may increase the amount of “extra” oil on the background of the cancellation of all obligations under OPEC+. Without the emergence of clear signs of slowing the spread of the coronavirus prices for Brent crude could remain under pressure and stay around $ 25-29.
In this scenario, the dollar can return to 80-82 rubles. Perhaps towards the end of April, the situation in the markets could improve on the background of the completion of strict quarantine measures in several regions of the world, — says head of Department of experts on the stock market “BCS” Vasiliy Karpunin.
The Russian market tries to squeeze out of the US and the Saudis
— According to the International energy Agency (IEA), the volume of lower demand in the oil market in the coming weeks will reach 20 million barrels per day (right now, the demand fell by 15 million barrels), — fixes the head of the analytical Department of financial AMarkets Artem Deev. — Within three months will be filled storage tanks in different countries and tanker capacity. It does not give the oil no chance for growth. Production cuts within OPEC+ or individual countries will not impact significantly on the oil market, which had not previously seen such a oversupply.
“SP”: — And some radical changes after the first of April you expect?
— After the first of April shall cease to deal OPEC+, and can receive additional volume of oil of 10 million barrels per day from Saudi Arabia, UAE, Iraq, Qatar, Norway and Brazil. Against this background, quotes may collapse to a level of $ 15-20 per barrel
But prices could fall in the moment, in early April. They are low, not yet established Alliance, the US and Saudi Arabia. The quotes will go up after squeezing Russia out of the market efforts by the US and Saudi Arabia. But this Union does not yet exist, and until real solutions are far away.
“SP”: — as for the ruble will be given?
— I think that after the fall of oil prices the equilibrium exchange rate of the ruble may reach 90-100 rubles per dollar.
Oil producers still come to their senses and agree
— Amid high volatility in the financial markets, the fall in oil prices of flight from risks in defensive assets and a negative news background the ruble weakened against the dollar by more than 18%. In the past few days are observed to modest fluctuations in the range of 77-79 rubles per dollar. During the same period, the price of oil fell by 49%, says a leading analyst of investment company QBF Ksenia Lapshina.
“SP”: — people care what will happen to the ruble.
— On the one hand, we can assume that the ruble has the potential to further decrease. Because the correlation between the oil price and the dollar exchange rate and ruble still remains, despite the work of the budget rule, which is intended to smooth out fluctuations in the exchange rate. If the second of March the price of a barrel of oil was $ 3480 rubles, as of March 27, the price had dropped to 2,000 rubles.
In this situation, the government and the oil companies best a weaker ruble. In addition, since the correction there is a capital outflow from the Russian stock market and probably it will continue in the next few weeks. Non-residents are afraid to invest in stocks and debt instruments of emerging markets, which are more risky than securities of the United States, Japan and Europe. As a result, reduced demand for the Russian ruble, while the demand for the dollar, on the contrary, grows.
“SP”: — Is not there any positive factors that could have a little to support the ruble?
— The dynamics of the markets shows that the mass panic has ended. Yes, oil prices do not grow, but they do not fall further, while the stocks bounce.
Likely, the ruble has already tested the local maxima in the history of coronavirus, so in April-may, the exchange rate will fluctuate in the range of 76 to 78 rubles to the dollar, while some uncertainty remains.
Towards the end of the epidemic (I believe in June), maybe we will see 75 rubles per dollar.
“SP”: — do you Think the members of the cartel will still be able to agree, seeing what impact his rash actions caused the world economy?
Markets believe that OPEC members+ still agree on a new meeting and will be able to take control of oil production. It’s already all exporters certify that in connection with low demand, they simply have no one to sell such volumes of oil.
The return of confidence to consumers and producers will be a sign for investors, and the investors ‘ interest in risky assets will be returned together with the growing demand and recovery in industrial activity.
Russia in the future can return to OPEC+
The current stabilization of the ruble is connected, primarily, with the end of falling prices in the global financial markets. Already we are seeing the growth of stock markets, oil prices after the collapse stabiliziruemost at $ 28 per barrel (mark Brent), which gives the opportunity for the ruble to gain a foothold on levels 77 per dollar and 85 per Euro, respectively, just at the current cost of oil, says a leading analyst of the financial company 8848 Invest Viktor Pershikov.
“SP”: — Very important words: at the current value. But how long can the oil can be so cheap?
The fundamental current oil prices seem too low to for a long time to remain at current levels. According to a statement by the Deputy Minister of energy Pavel Sorokin, the fair price of oil is at $ 45-55. The head of RDIF Kirill Dmitriev noted that in case of consistency of actions of OPEC members, Russia can again return deal with OPEC that will support the oil prices.
Thus, in the foreseeable future, I expect an increase in oil prices, including on the background of recovery of global commodities.
“SP”: — And how much can cost the ruble in the most positive scenario?
— Support the ruble will also have the actions of the Central Bank and the Finance Ministry to sell foreign currency to total 220 million dollars a day. And I expect the ruble to levels in the 70 to the dollar and 78 per Euro in the second and third quarter of 2020. But a stronger national currency is currently not expected.
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