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Thread: The Russian economy (catch all)

  1. #241
    Council Member Firn's Avatar
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    I think we discussed that earlier. I wouldn't talk about a crash in terms of price, but that level will reduce Russia's economic freedom of movement and seems to reinforce rather harmful moves aimed at protecting the state's balance sheet at the cost of the Russian economy.


    VoxEU's most recent article gives a nice overview of Europe’s Russian connections, as it is aptly named. Lots of nice graphs and maps.



    Surprising indeed - or rather mostly not...
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

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  2. #242
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    Firn----heads up. Seven pulls in a row.

    http://www.bloomberg.com/news/2014-0...tml?cmpid=yhoo

  3. #243
    Council Member Firn's Avatar
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    From the article:

    Russia has skipped 15 auctions this year as President Vladimir Putin’s standoff with the U.S. and its allies over Ukraine and the threat of tougher sanctions triggered a selloff in the nation’s assets. The EU is considering imposing more penalties amid allegations Russia is dispatching troops and backing militias to open a new front in the conflict that the United Nations estimates has claimed 2,600 lives.

    The other side of the coin, at least partly considering that countries like Cyprus are mostly just stepping stones for Russian money for safety, tax and camouflage.



    As usually it is important to keep in mind that small countries are more susceptible to external causes. Flows through London's City and Germany's Frankfurt dilute quickly in those large economies....
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  4. #244
    Council Member Firn's Avatar
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    Russian Oil Giant Rosneft to Shed a Quarter of Staff, Report Says

    The Moscow Times Sep. 04 2014 12:48

    In very simplistic terms the Russian economy works in important parts like that:

    Energy sector -> exports; finances -> state budget; finances -> too large public sector + too generous social promises. All dominated by the Kremlin, but all quite fragile in the long run if the exports won't deliver enough hard currency.

    Last month Sechin wrote to the government to request that the country's national welfare fund spend 1.5 trillion rubles ($40 billion) to buy Rosneft's debt.

    In the face of declining output from mature Siberian fields, Rosneft's production in August dropped to its lowest level since March 2013, monitoring agency CDU TEK said earlier this week, Bloomberg reported.
    The latest bit about declining output in mature Siberian fields reminds me a bit of the last Soviet decade...
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  5. #245
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    Firn---have you ever wondered if the Russian Pension Fund is really just one big Ponzi move the shell around with the pea concept and is basically "floating" on alleged amounts of money? Especially since the Fund "seems" to slowly not able to be used here or there as many in the Duma demand right now.

    Notice this issue between the Fund and MacDonalds that dates back to 2013 --one would think the Fund would be interested in every Rubel paid into it?

    Granted it maybe political in nature but to refuse 26K thousand employee monthly Fund payments is not chump change.

    MOSCOW, September 5 (RIA Novosti) - McDonald’s has filed at least eight lawsuits against Russia’s Pension Fund, saying it refused to accept relevant documents from the company, as a result of which McDonald’s Russia employees’ pensions have not been accumulated since 2013, Russian Izvestia newspaper reported Friday.

    “Starting from the third quarter of 2013 and until today, in response to submitted documentation, McDonald’s company receives refusals from Russia’s Pension Fund to accept these documents, which is a direct violation of McDonald’s employees’ rights,” Izvestia quoted McDonald’s Russia Director for Public Relations Svetlana Poliakova as saying.

    Poliakova argued that the company submits the documentation to the Pension Fund in accordance with all the requirements.

    However, Russia’s Pension Fund representatives explained that the responsibility for McDonald’s employees’ rights violations lies within the company itself, as the majority of submitted documents contained mistakes, including ones in the names of employees, and the payment amounts for each of them, Izvestia reported.

    According to Russia’s Pension Fund, in 2013 the number of mistakes in the documents reached its maximum. Pension Fund argues that it has repeatedly called on McDonald’s managers to correct the mistakes and resubmit the papers, but the company ignored all requests. So, the accounts on the basis of which the pension rights are formed, were not ready.

  6. #246
    Council Member Firn's Avatar
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    After a bit of reading is quite clear that:

    a) The Russian funds in question have a (very) low percentage in equity. Thus real performance suffered compared to the international benchmarks

    b) Have difficulties, as pretty much everybody to find fixed income safe according to international standards with a decent return

    c) Are heavily invested within Russia

    d) Are and have been under pressure to finance pet projects of the government and to support state companies overtly

    -----

    ANNUAL SURVEY OF LARGE PENSION FUNDS AND PUBLIC PENSION RESERVE FUNDS October 2013

    Fund’s surveyed ranged from conservative, fixed income oriented portfolios to return seeking portfolios with significant allocations to equities and alternatives. Russia’s VTB fund was 100% invested in fixed income and cash.
    Table 5 is perhaps the most interesting one with a rough breakdown of investment categories, only that Russia is missing...

    Russian pension funds to invest $1 billion in venture funds and innovative companies

    According to a report by an expert committee answerable to the government, as of 2013 the pension system held around 3.3 trillion rubles (around $100 billion). This means that about $1 billion in pension funds will be invested in innovations and venture companies. This amount is comparable to the entire volume of investments in the Russian venture capital market in 2013.

    The report, however, notes the high risks of such investments and the lack of high-quality innovative projects.
    Sorry, the table isn't easy to paste:

    State

    Name
    Founded
    USD bn.
    % of GDP
    % increase yoy (2012)


    Norway

    Government Pension Fund - Global (GPFG)
    1990
    694.4
    133.1
    14.7


    Russian Federation

    National Wealth Fund (4)
    2008
    88.6
    4.3
    -3.7
    Putin Rebuffed by Pension Funds as $14 Billion Sales Loom (2013)

    While Russia’s private pension funds are permitted to invest as much as 65 percent of their capital in equities, they have allocated only about 10 percent, according to a Goldman Sachs Group Inc. report on Feb. 4. In the U.S., pension funds had about 52 percent of their holdings in shares last year, according to a global survey by Towers Watson & Co. (TW) Many Russian private funds had a majority of their holdings in stocks before the Micex index’s 67 percent retreat in 2008 led them to become more averse to risk, Goldman said.
    Last edited by Firn; 09-05-2014 at 05:56 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  7. #247
    Council Member AmericanPride's Avatar
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    Firn,

    The second article seems like the Russian pension fund is battling the same temptation to chase promises of high returns that damaged U.S. municipal and state pension funds prior to the 2008 recession.
    When I am weaker than you, I ask you for freedom because that is according to your principles; when I am stronger than you, I take away your freedom because that is according to my principles. - Louis Veuillot

  8. #248
    Council Member Firn's Avatar
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    Quote Originally Posted by AmericanPride View Post
    Firn,

    The second article seems like the Russian pension fund is battling the same temptation to chase promises of high returns that damaged U.S. municipal and state pension funds prior to the 2008 recession.
    I would say that this 1% is still peanuts. Would be nice ones however for those with an innovative? company, ideally with some links into the state apperat.

    Personally I think it is a bad thing to demand so many different and often conflicting goals from one fund. I think the Global Norwegian SWF does one of the best jobs in the business because it does focus on the long term performance - in the true sense of the word - while the proper ethical rules have really no impact on the bottom line. It is not tasked to find venture company x or finance state company y for political expendiency. Of course it's absolute and relative size make it rather special and it can operate in a very stable and sensible political and economical environment which give it quite an edge over some of the others.

    I really hope that the fund will be much more active when it comes to protecting the shareholder.
    Last edited by Firn; 09-05-2014 at 06:14 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  9. #249
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    Firn--Brent broke through the 100 barrier and is at 99.80 and falling. Tendency is further falls.

    Which means sour ie Russian crude will fall to about 92-90 range and that hurts as they planned for 104.

    https://twitter.com/markethell/statu...438272/photo/1

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    Firn---with EU gas supplies quiet high right now and still growing---the need for winter gas will be down.

    Then this showed up today via a blog and surprised me---with the Russia needing a 113 baseline price for it's crude.

    From the "it's an ill wind" department of news: Brent crude is trading below $100 for 1st time in a year. Russia's budget balances at $113.

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    Quote Originally Posted by Stan View Post
    We used to think that The Ukraine was inept at adopting an armament program (something most would develop and be prepared to fight) as early as 95. Turns out, they were more interested in business and copying Russian Sierra to sell elsewhere I recall more than 30% GNP was dedicated to defense, but for the purposes of selling, not remotely interested in defending the Mother Land !

    There are literally hundreds of sites regarding this, although none go right out with a price per "article". The going price (backwards that is) is a cool M for at least three each. The offer BTW still stands I am told.

    Some links to ponder (light reading if you will )
    MANPADS duties
    Do a little digging - you'll get there

    Support Anti-Terrorism
    This one leads to just about anywhere



    It took place here, but not to the extent most feared. Glad to say that era for Estonia is dead and gone. Take no Sierra (God forbid I ever make it to Parliamentary status)
    Did you help Ukraine to protect its territory? I want to live in free country without Russian empire. There is only one way - Putin must go.

  12. #252
    Council Member Firn's Avatar
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    Russia reduces gas exports to Poland

    Russia's gas supplies to Poland have dropped by 45%, Poland's state gas firm PGNiG says, amid tensions over Ukraine.

    The news came just hours after Poland stopped providing gas to Ukraine through "reverse-flow" pipelines.

    The Russian gas volumes were 24% lower on Tuesday and 20% lower on Monday, according to PGNiG. That shortfall prompted Poland to halt reverse-flow.

    Poland and Ukraine rely heavily on Russian natural gas. Russia is in a pricing dispute over gas with Ukraine.

    Some analysts believe Russia, which stopped gas supplies to Ukraine in June over the pricing dispute, is punishing Poland for sending gas to Ukraine.
    It looks like a test, which obvioulsy gets denied to see the initial Polish, Ukrainian and European reaction. One has to keep in mind that the SU was a reliable supplier, especially in the later stages when it needed all the hard currency it could get. The Kremlin seems to increase it's stakes in the play about Russia's future.
    Last edited by Firn; 09-11-2014 at 01:24 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  13. #253
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    Quote Originally Posted by Firn View Post
    Russia reduces gas exports to Poland



    It looks like a test, which obvioulsy gets denied to see the initial Polish, Ukrainian and European reaction. One has to keep in mind that the SU was a reliable supplier, especially in the later stages when it needed all the hard currency it could get. The Kremlin seems to increase it's stakes in the play about Russia's future.
    Firn---thought sanctions were to be against the "others" not your own population.

    Well it's back to the Russian Lada (the old Fiat 424) and baggy clothes fashioned from the 30s I guess.

    Somehow the Kremlin doesn't seem to get that #sanctions is what you do to SOMEBODY ELSE.
    #foodban #clothesban #caran
    http://www.vedomosti.ru/politics/new...ilej-i-odezhdy

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    Firn---seems to be an unintended side effect of the Russian food bans.

    Is Putin's food ban triggering bloodshed on Moscow's fruit and veg markets?
    2 contract killings already:
    http://www.gazeta.ru/social/2014/09/10/6209477.shtml

  15. #255
    Council Member Firn's Avatar
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    Russia restricting Austria's gas supplies

    I have made a quick search if other European countries suffered also a drop in supply.

    According to the energy regulator E-Control, Gazprom supplied Austria 15 percent less gas than had been previously agreed.

    Similar issues have hit Poland, which has seen their supplies cut by 45 percent, and Slovakia, which has ten percent less gas than expected for the period.
    I don't know how this compares to previous episodes, it might be just coincidence, but I think most will be rather sceptical. The Kremlin plays with the trust posed in it's role as supplier, which was formed during the cold war.

    In any case tomorrow the new EU sanctions should be put in place. I'm curious what kind of counter-sanctions to expect from the East. After the food bans I would not rule out a lot.
    Last edited by Firn; 09-11-2014 at 08:35 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  16. #256
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by OUTLAW 09 View Post
    Firn--Brent broke through the 100 barrier and is at 99.80 and falling. Tendency is further falls.
    Hard to say if that willl happen. The latest drop was a response to the IEA revising demand forecasts down, but the Saudis have cut production substantially and some analysts think they are going to try to defend the $100 mark. Of course they may or may not be able to do that. Have to wonder if Russia will cut back exports to sustain pricing, and if the Chinese will advance some credit vs future deliveries.

    Quote Originally Posted by OUTLAW 09 View Post
    Which means sour ie Russian crude will fall to about 92-90 range and that hurts as they planned for 104.
    I still can't begin to figure out what index or benchmark you are using for "sour crude"... perhaps you'd care to make that clear?

    Unfortunately I no longer have access to a Platts feed (and I'm not about to pay for it), but the most recent figures I see:

    http://af.reuters.com/article/commod...BrandChannel=0

    say that Urals (primary Russian export blend) was trading as of Sept 1 at dated Brent minus $.95. That spread varies of course, but I see no reason to expect that it will vary radically. Do you? If so, what are the reasons.

    Again, "sour crude" per se is not a traded entity. If you want to refer to price spreads between Brent (the usual reference benchmark) and Russian exports the figure you need to refer to is the spread between Brent and Urals Blend.

    Russia does talk about a balanced budget at $114, but we all know that nations can go a long long time without a balanced budget. Sustained prices below $100 would give some pain, but it's in no way certain that it would cause any policy changes, especially since policy in the Ukraine would have no significant effect on oil prices. Even if Putin brought the troops home and became possessed by the spirit of Mother Teresa, that wouldn't change the global oil equation in the least.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Quote Originally Posted by Dayuhan View Post
    Hard to say if that willl happen. The latest drop was a response to the IEA revising demand forecasts down, but the Saudis have cut production substantially and some analysts think they are going to try to defend the $100 mark. Of course they may or may not be able to do that. Have to wonder if Russia will cut back exports to sustain pricing, and if the Chinese will advance some credit vs future deliveries.



    I still can't begin to figure out what index or benchmark you are using for "sour crude"... perhaps you'd care to make that clear?

    Unfortunately I no longer have access to a Platts feed (and I'm not about to pay for it), but the most recent figures I see:

    http://af.reuters.com/article/commod...BrandChannel=0

    say that Urals (primary Russian export blend) was trading as of Sept 1 at dated Brent minus $.95. That spread varies of course, but I see no reason to expect that it will vary radically. Do you? If so, what are the reasons.

    Again, "sour crude" per se is not a traded entity. If you want to refer to price spreads between Brent (the usual reference benchmark) and Russian exports the figure you need to refer to is the spread between Brent and Urals Blend.

    Russia does talk about a balanced budget at $114, but we all know that nations can go a long long time without a balanced budget. Sustained prices below $100 would give some pain, but it's in no way certain that it would cause any policy changes, especially since policy in the Ukraine would have no significant effect on oil prices. Even if Putin brought the troops home and became possessed by the spirit of Mother Teresa, that wouldn't change the global oil equation in the least.
    Dayuhan--all good points but then is this big but---initially when the Crimea started Russia was talking about needing a 95 base price, then as the Ukraine hit it was talking about a price of 104 and the last three days as been in the 114 range.

    Now what is interesting is that as the sanctions have been hitting now harder and harder the demand on the required pricing seems to be headed upwards.

    Then there was a press release yesterday stating they could absorb all financial hits by using the cash flow on oil/gas that is coming in--BUT that has been long planned for other things they have designed it to be used for---appears to me to be just one big Ponzi scheme simply moving the money around and appearing to be fifthly rich.

    Then yesterday a short tweet came out of eastern Europe indicating that the Urals fields are in fact in a major decline and will be by 2017 producing nowhere close to what they are now--that is why the heavy new push into the Artic region.

    And the sanctions yesterday were designed to do exactly that limit and or stop any further Artic development because Russia needs western tech of that type of drilling and this is the kicker--all oil/gas services companies of the west were in fact told yesterday to stop work in Russia---which Russia relies on heavily for their field maintenance.


    Dayuhan---this popped up this morning via twitter:

    #Russia could see its $19B surplus become a deficit by end of 2014, as oil prices continue to slide.

    http://oilprice.com/Energy/Oil-Price...il-Prices.html

    IMO--there is an unusual effect going on right now in the sour oil side of the house---virtually low to no demand and a continuing sliding price base that sees no bottom yet.
    Last edited by OUTLAW 09; 09-12-2014 at 06:51 AM.

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    Quote Originally Posted by OUTLAW 09 View Post
    Firn---seems to be an unintended side effect of the Russian food bans.

    Is Putin's food ban triggering bloodshed on Moscow's fruit and veg markets?
    2 contract killings already:
    http://www.gazeta.ru/social/2014/09/10/6209477.shtml

    This appeared today via RIA concerning possible inflationary increases due to the banned foods and other products.

    There was a short Interfax release yesterday that some of the banned items still on the shelves are being priced 21% higher than before the ban---not so sure even the CB even understands the price development on banned items--since many of their employees started after the Cold War days where banned items were being sold on the black markets across the entire country as a way of life.

    From RIA today:

    MOSCOW, September 12 (RIA Novosti) – The Russian Central Bank said in a statement Friday that import restrictions will have a short-term influence on price growth in Russia.

    “The growth in inflation was also caused by the introduction of restrictions on foreign trade,” the bank said in a statement. “Further inflation dynamics will be determined, among other things, by how fast the economy adjusts to these restrictions. It is highly probable that the increase in the consumer price growth rate, caused by the above-mentioned factor, will be short-term.”

    According to Russia’s State Statistics Service, prices gained 0.2% since September 1 and 5.8% since the start of the year.

  19. #259
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by OUTLAW 09 View Post
    Dayuhan--all good points but then is this big but---initially when the Crimea started Russia was talking about needing a 95 base price, then as the Ukraine hit it was talking about a price of 104 and the last three days as been in the 114 range.
    Given the extent of the change over a very limited time, and given that we've no access to the process by which these numbers were generated and we've no idea what agendas are being pursued by the people announcing the numbers... take them all with multiple grains of salt.

    Certainly lower oil prices will cause economic stress, but there's little reason to expect that stress to change Russian policy on the Ukraine, or on anything else.

    Quote Originally Posted by OUTLAW 09 View Post
    Then there was a press release yesterday stating they could absorb all financial hits by using the cash flow on oil/gas that is coming in--BUT that has been long planned for other things they have designed it to be used for---appears to me to be just one big Ponzi scheme simply moving the money around and appearing to be fifthly rich.
    I generally give Russian press releases about as much credence as I give to yesterday's toilet paper. That Ponzi scheme is of course quite common, and while it eventually catches up, do you think it will catch up soon enough to have an impact on events in the Ukraine?

    Quote Originally Posted by OUTLAW 09 View Post
    Then yesterday a short tweet came out of eastern Europe indicating that the Urals fields are in fact in a major decline and will be by 2017 producing nowhere close to what they are now--that is why the heavy new push into the Artic region.
    Twitter is not generally a vehicle for serious analysis, and unless it links to credibly sourced material such things are generally best ignored. The Russian oil industry does of course face major problems across the board, and those will be exacerbated if prices stay below $100, but that picture has been analyzed to death and there's little reason to suggest sudden or recent changes in the picture. It's a big problem that Moscow will have to deal with, but again it's far from certain that it will affect Russian policy in the Ukraine.

    Quote Originally Posted by OUTLAW 09 View Post
    And the sanctions yesterday were designed to do exactly that limit and or stop any further Artic development because Russia needs western tech of that type of drilling and this is the kicker--all oil/gas services companies of the west were in fact told yesterday to stop work in Russia---which Russia relies on heavily for their field maintenance.
    It will be interesting to see what they do. They may decide to go fro broke, take what they want in the Ukraine and impose a fait accomplii, knowing that sanctions will degrade over time once the deed is done. They may also turn to China, though brother Han drives a hard bargain and gives nothing away: the quid pro quo will probably be painful.

    Quote Originally Posted by OUTLAW 09 View Post
    #Russia could see its $19B surplus become a deficit by end of 2014, as oil prices continue to slide.
    Certainly true, but as all Americans know, governments routinely operate at deficits for many years. Again, a problem for Moscow but not necessarily a problem that will make them less aggressive. They could turn more aggressive, if they decide that a bit of jingoistic fervor will provide a distraction from economic issues.

    Quote Originally Posted by OUTLAW 09 View Post
    IMO--there is an unusual effect going on right now in the sour oil side of the house---virtually low to no demand and a continuing sliding price base that sees no bottom yet.
    On what evidence? I see nothing really unusual, and nothing that's at all specific to "sour crude" or to Russian exports. Demand is there, of course, it's just somewhat below expectations. US production is up, the fear factor in Iraq is receding, and Libya seems to be pumping again, despite the mess. Normal ups and downs, really. Some producers, Russia among them, made some unsupportable estimates of the cash they'd have available, and will pay a price. It will hit a lot of producers harder than it hits Russia: keep an eye on Nigeria and Venezuela, in particular.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Quote Originally Posted by Dayuhan View Post
    Given the extent of the change over a very limited time, and given that we've no access to the process by which these numbers were generated and we've no idea what agendas are being pursued by the people announcing the numbers... take them all with multiple grains of salt.

    Certainly lower oil prices will cause economic stress, but there's little reason to expect that stress to change Russian policy on the Ukraine, or on anything else.



    I generally give Russian press releases about as much credence as I give to yesterday's toilet paper. That Ponzi scheme is of course quite common, and while it eventually catches up, do you think it will catch up soon enough to have an impact on events in the Ukraine?



    Twitter is not generally a vehicle for serious analysis, and unless it links to credibly sourced material such things are generally best ignored. The Russian oil industry does of course face major problems across the board, and those will be exacerbated if prices stay below $100, but that picture has been analyzed to death and there's little reason to suggest sudden or recent changes in the picture. It's a big problem that Moscow will have to deal with, but again it's far from certain that it will affect Russian policy in the Ukraine.



    It will be interesting to see what they do. They may decide to go fro broke, take what they want in the Ukraine and impose a fait accomplii, knowing that sanctions will degrade over time once the deed is done. They may also turn to China, though brother Han drives a hard bargain and gives nothing away: the quid pro quo will probably be painful.



    Certainly true, but as all Americans know, governments routinely operate at deficits for many years. Again, a problem for Moscow but not necessarily a problem that will make them less aggressive. They could turn more aggressive, if they decide that a bit of jingoistic fervor will provide a distraction from economic issues.



    On what evidence? I see nothing really unusual, and nothing that's at all specific to "sour crude" or to Russian exports. Demand is there, of course, it's just somewhat below expectations. US production is up, the fear factor in Iraq is receding, and Libya seems to be pumping again, despite the mess. Normal ups and downs, really. Some producers, Russia among them, made some unsupportable estimates of the cash they'd have available, and will pay a price. It will hit a lot of producers harder than it hits Russia: keep an eye on Nigeria and Venezuela, in particular.
    Dayuhan----here is the continued slide to now 95 per barrel for Ural sour.

    You would be surprised what comes via twitter these days including oil information.

    This came via twitter--pic is the pricing slide in chart form and you must admit there seems to be no bottom right now:

    Urals Crude at $ 95.34 today.

    pic.twitter.com/qifuQ0lO0e

    There are a couple of things in play right now that are contributing---number one is the high US production that is flowing straight to the US refineries which are designed to handle mainly sour thus a slumping need for Urals sour rught now in the US---production does not seem to have been reduced by Qatar/UAE and the KSA and that is leading to an oversupply right now and 2) there seems to be a general slump in demand for what ever reason.

    The Swedes are saying it it hits 93 by say next Tuesday Wednesday then there is in fact no bottom until the 85-88 ranges which could in fact happen by the week after next.

    That is a major problem for Russian finances especially in the face of this latest round of sanctions.

    Rostnef is asking the Russian CB for a bailout of over 46B just to get through until the end of 2014 and the sanctioned banks are standing in line as well.

    Seems the Ponzi scheme is clamoring for money and the CB is the only place to get it since the finance markets have been cut off.

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