Coronavirus a coronavirus, and oil above all else. Global energy players, even amid threats to world order continue a clever attacking move to increase the price of oil, and she almost fell to the level of 1998 when the country defaulted. Then the price of oil reached $ 10 a barrel, now oil Urals falls to 13. What’s going on and whether this limit?
On Sunday, news feeds has stirred up a report about the attack Yemeni Houthi rebels continued in the Saudi capital of Riyadh. However, there were no casualties (two lightly wounded), the oil infrastructure is not damaged, so that the diversion did not shake the price of oil. Moreover, it continued to fall. Although, by the way, the Saudis directly accused of organizing attacks Iran, vitally interested in the increase in oil prices (Iran’s budget is balanced with oil prices at $ 50).
No less important for the global energy market news arrived from Venezuela, where it suddenly turned all their projects “Rosneft”. However, Russia refused to support the regime of Nicolas Maduro: “Rosneft” reported that sells its assets of some state-owned companies. Most likely, we are talking about company “Roszarubejcenter”: it was established on 28 March, the Russian Federation represented by the Federal property Agency with an authorized capital 322,7 billion.
Most likely, it was those two facts and were forced to urgently discuss the American President Donald trump with Vladimir Putin. Of course talked about the coronavirus, but obviously the situation on the oil market care about both presidents much more — both, unlike the Saudis are interested in maintaining high prices.
About, whether will suffice Russia in the current situation, political will and financial resources to pursue a bold attacking move “Free press” asked our resident experts.
None of the OPEC did not try to resume negotiations
“SP”: — How you think, how long can last this period of uncertainty associated with the oil prices? And whether it is connected only with the coronavirus?
— At the moment it is difficult to give any predictions about the end of the period of uncertainty in oil prices. This week the focus of investors will be chained to the March index of business activity, which will show the current dynamics in the economies, especially Chinese, because you need to look at the pace of recovery in the Chinese economy after quarantine — the Director of the office sales Finance company “BCS” Vyacheslav Abramov. — As you can see in the oil market so far, none of the OPEC countries+ USA and no particular measures are taken for the resumption of negotiations, and on 1 April the deal will end.
“SP”: — what will happen after that?
— I think in the current situation of the imbalance of supply and demand may be about 10-15 million barrels per day, which will lead to filling the silos in 2 months.
At the same time, I should add that the Texas Petroleum (one of the largest oil and gas companies in the United States) have already expressed their willingness to reduce production by 10%, if there is a new deal on OPEC+.
“SP”: — Why the markets did not react to the worsening situation in the middle East?
– There are several reasons. The conflict began a long time ago and occasionally there are situations of aggravation, such as, for example, on 15 February, when militants shot down a military aircraft at the border of Saudi Arabia and Yemen. Now a ballistic missile was shot down on approach to Riyadh, no one died, so attention to this is riveted to a lesser extent now.
The dollar could jump up to 115 rubles
“SP”: — All, of course, interested in what will happen with the global economy in April.
By April 2020, I predict a slight drop in the ruble. External background is negative: the closure of borders in connection with the coronavirus pandemic, the decline in oil demand and the collapse of OPEC+. But there is a positive: support of the ruble from the Central Bank and tax period that will lead to the sale of foreign currency from exporters for VAT payment, — says the President of the Russian-Asian Union of Industrialists and entrepreneurs Vitaly Mankevich. Payments on the external debt for April will be $ 3.7 billion that will not create additional pressure on the ruble.
However, it should be noted that the budget for 2020 laid out based on the cost of a barrel of oil at $ 57 dollars and the dollar exchange rate of 65.7, and a fiscal rule operates from the cost of the $ 42.4 per barrel of Urals, i.e. at a price below the government will spend reserves.
“SP”: — How much will the ruble?
— Dynamics of oil and the ruble depends on the situation with the spread of the coronavirus in Russia and in the world. Since the peak of the incidence is passed only in China, but production widely closed in Europe and in the United States and in Southeast Asia, we should expect further fall in energy demand.
For April, I predict the dollar to 85 rubles. However, do not rule out that force majeure could lead to even more serious falling of demand for oil to $ 15-20, which can lead to a drop in the ruble exchange rate to 100 to 115 to the dollar.
Global players need to act cohesively
— A period of uncertainty in global markets may last from 3 to 6 months. Nobody understands and can’t realistically calculate the consequences of a coronavirus and the introduction of widespread quarantine, commodity markets remain under pressure, — considers the head of the Luxembourg office of an international consulting Corporation KRK Group Nikita Ryabinin. — What new record will raise the oil markets and other commodity platforms? We are already seeing new horizons $ 13 dollars per barrel. As and when the market will recover? This will directly depend on demand, which fell at the moment a quarter, and of the coherence and decisiveness of the actions of the main players in the market.
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