Reply With QuoteFitch downgraded #Russia's credit rating to"junk"level,now expects reduction of #economy by 4%
http://bit.ly/1FBMGsS
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Russian better have a Plan Z by now as Brent is heading towards 40 since it broke through the glass barrier of 50.Originally Posted by OUTLAW 09
Brent crude has continued its fall today, slipping to $49.16 per barrel
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Fitch downgraded #Russia's credit rating to"junk"level,now expects reduction of #economy by 4%
http://bit.ly/1FBMGsS
pic.twitter.com/loH5Utfe4Y
S Guriev: 'If low oil prices persist, and sanctions remain in place, Russia will run out of cash by the end of 2016'
http://www.project-syndicate.org/com...guriev-2015-01
At this rate Brent will break under 40 by the end of next week--once 40 is broken it will actually make the run to 20 to test to see exactly where the ME is ready to support or let oil continue the fall into the upper 10s as their production n costs are in the 2-4 per barrel ranges.
Not sure if it makes 20 exactly just what Russia will do as they have cranked up production in order to make some money just via production but then that drives the oversupply which is the killer right now.
Oil drops to $48 as Gulf official says Opec will keep pumping | via @Telegraph
http://fw.to/seiKmKT
Federal highway "Lena" "M56" (1163 km)
Instead of repair, 44bn rubles were redirected to #Crimea's infrastructure -TT
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Tehran (AFP) - Iran's President Hassan Rouhani, flanked by Venezuelan counterpart Nicolas Maduro, vowed Saturday to "neutralise" the threat posed to both countries by plummeting oil prices, in a barely veiled broadside at Saudi Arabia.
OPEC members Iran and Venezuela are reeling from a slide in the cost of crude to around $50 per barrel from $100 just six months ago, a precipitous fall that is straining their budgets.
Losses accelerated after the Organisation of Petroleum Exporting Countries cartel, of which Iran and Venezuela are founders, chose late last year not to cut output despite lower prices and oversupply.
Rouhani, his oil minister and other top officials in Tehran have criticised fellow OPEC member Saudi Arabia for not supporting steps to support higher crude prices.
Rouhani was meeting with Maduro when he again appeared to point the finger at Riyadh, in remarks carried on the Iranian government's website.
"Without doubt, cooperation of countries that are on the same line in OPEC can neutralise the plans of some powers who are against OPEC, stabilising a reasonable price for oil in 2015," Rouhani said.
Maduro arrived in Tehran late Friday, accompanied by his ministers for oil, foreign affairs, finance and industry, plus Venezuela's Central Bank chief, on what Iranian state media said would be a 24-hour trip.
According to the official remarks, Maduro echoed Rouhani, "calling for the cooperation of oil exporting countries to bring back stability."
Iran's supreme leader, Ayatollah Ali Khamenei, also met Maduro and denounced what he called "the bizarre decrease of oil prices in such a short time."
"This can only be a political act... Our enemies use petrol as a political lever and have certainly a role to play in the lowering of prices," he said, without elaborating.
Iran's present budget was based on an oil price of $100, leaving a big shortfall in recent months. In December, Tehran unveiled a draft budget for the next financial year predicated on $70 per barrel.
Iran and Venezuela pledged to reach agreements during Maduro's trip that would "expand trade and investment, export of technical and engineering services and collaboration in pharmaceuticals."
"Venezuela can be a suitable base for the export of Iran's goods and services to Latin American countries," said Rouhani, who is seeking to reduce Iran's reliance on oil sales by boosting non-oil exports.
Venezuela has the world's largest proven oil reserves but its economy -- 96 percent of the government's foreign currency comes from crude -- has been gutted by inflation and basic goods shortages.
In late December, recession-hit Venezuela reported that inflation for the 12 months to November topped 63 percent -- one of the highest rates in the world.
Maduro travelled to China this week in search of investment and said he secured $20 billion.
"Iran can cooperate to remove Venezuela's needs in housing, road construction, food products and medicine," Rouhani added Saturday.
More bad news for Putin: Russias banks need to be bailed out now http://wapo.st/1DQJWX
Brent accustomed & comfortable below $50
http://www.wsj.com/articles/brent-cr...ing-1421039495
Here comes 40 per barrel:
Good morning!
It is a new week, and crude oil is making new lows.
Near 8:10 a.m. ET on Monday morning, the price of West Texas Intermediate crude oil was down more than 3% to below $47 a barrel, hitting as low as $46.77 as WTI closes in on another multiyear low.
The latest drop in crude on Monday morning comes after a research note from Goldman Sachs saw the firm put a six-month price target on WTI of $39 a barrel.
Russian firms running out of cash, facing bankruptcies says head of Russian banking assoc.
http://finance.yahoo.com/news/russia...NUihYApsjQtDMD
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Russian Banks Plead for Interest Rate Cut as Borrowing Costs Spiral | Business | The Moscow Times http://www.themoscowtimes.com/busine...al/514253.html
Ukraine's Hard Currency Reserves Suffered Biggest Fall Since Soviet Era in 2014 | Business | The Moscow Times
http://www.themoscowtimes.com/busine...14/514257.html
The unravelling union: Putin's plans for Russian-led regional integration are in disarray
http://on.ft.com/1yc2Y5f pic.twitter.com/KHXtnm4pYF
Russias Sinking Economy Could Provoke Unrest and Revolutions in Central Asia and Caucasus.
https://foreignpolicy.com/2015/01/12...-its-doorstep/
The new world oil order: US crude drops below $46/bbl for first time since Apr2009.
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Crude Oil (Brent) is at $46.54. The Brent has fallen about 10% this week. Might hit $40 per barrel already next week.
Russia face wave of bankruptcies, Banks may need more than $155B in capital for credit and foreign exchange losses.
http://cnnmon.ie/1y34R5H
Back to over 65 rubles to the dollar as oil continues its slide #RUB #oilprice
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Abu Dhabi (AFP) - The United Arab Emirates said on Tuesday that OPEC will no longer move to shore up crude prices, arguing that rising North American shale oil output needs to be curbed.
World prices have been falling since June but the pace of the slide accelerated in November when the Organisation of the Petroleum Exporting Countries (OPEC) decided to maintain its production unchanged at 30 million barrels per day.
Analysts say that richer cartel members like the UAE have been ready to accept the price fall in the hope that it will force higher-cost shale producers out of the market.
"We cannot continue to be protecting a certain price," UAE Energy Minister Suhail al-Mazrouei said.
"We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected," he told participants in the Gulf Intelligence UAE Energy Forum in Abu Dhabi.
Oil prices continued their slide towards six-year lows in Asian trade on Tuesday after Brent crude closed below $50 a barrel the previous day for the first time since April 2009.
The fall came after Wall Street investment titan Goldman Sachs slashed its price outlook, adding to anxiety about global oversupply, weak demand and soft growth in the key Chinese and European markets.
Brent crude for February delivery fell $1.33 to $46.10 a barrel -- around its lowest point since April 2009.
US benchmark West Texas Intermediate shed $1.13 cents to $44.94 -- its weakest level since March 2009.
Mazrouei said the UAE remains "concerned" about balance in the oil markets but "cannot under any circumstances be the only party responsible," in reference to rising output from non-OPEC members.
Oil producers outside the cartel should be rational about their output, he said, adding that current prices are "not sustainable" for them.
"We are telling the market and other producers to be rational, to be like OPEC and look at growth in the market," Mazrouei said.
He said that if OPEC had opted to cut production, other producers would have stepped in to make up the lost output and the cartel would have lost market share without any effect on prices.
Mazrouei said current prices were "not sustainable," particularly for producers outside the Gulf region.
He said that with oil below $50 a barrel, it was uneconomic for shale oil producers to keep investing in increasing production.
"Shale oil brings almost four million (barrels per day) for the United States, and the hope is that it will bring another four million by 2020. That cannot be sustained, produced or invested in at the current oil price," he said.
Mazrouei said he did not expect a swift recovery in prices.
"It is unlikely that we'll see a sudden rise," he said.
Bear markets are always big challenges for oil exporters but this one does certainly come at one of the worst times for a country like Russia hit by many, mostly self-inflicted problems at once. Every additional time span at such low prices increases the pressure on the Russian economy and the Russian budget.
As was discussed before the Ruble crash does absorb a great deal of the direct damage on the budget but comes with high inflation, huge credit pressure and makes the Russian market far less attractive, reducing foreign investments even further. In short especially for European companies Russia as a market has turned from a golden opportunity to expand into a blood bath, as lots of the cost drivers are in euros but the revenue in euro has been cut by well over a third.
With Russian forces still occupying the Crimea and parts of SW-Ukraine and no political solution in sight and all the macro indicators pointing towards a recession with high inflation it is difficult to find bright spots in the Russian economy. A boost might actually come from the often very volatile energy market, but could it be in time for the economy and the political system?
The banking sector in Russia is of course under massive strain and I will maybe give it a closer look later. I mentioned earlier the very much exposed Austrian Raiffeisen, it's stock has lost more then 60% of it's value in one year.
P.S: That Iranian-Venezuelian show is deeply tragicomic, a parody of two pretty powerless politicians being busy for their internal audience. It would be nice to check that statement in a couple of years, but I and pretty much everybody else will have forgotten it by then...
So with what will Venezuela pay those goods?Iran and Venezuela pledged to reach agreements during Maduro's trip that would "expand trade and investment, export of technical and engineering services and collaboration in pharmaceuticals."
"Venezuela can be a suitable base for the export of Iran's goods and services to Latin American countries," said Rouhani, who is seeking to reduce Iran's reliance on oil sales by boosting non-oil exports.
Last edited by Firn; 01-13-2015 at 12:14 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
Official inflation 11.4% in Russia in 2014 but @aifonline price survey says it was actually 29.5%, only getting worse
http://www.aif.ru/money/mymoney/1419721
Much to the chagrin of global oil producers, $50 per barrel may become the ceiling, not the floor, for oil prices http://www.project-syndicate.org/com...letsky-2015-01
Russia Update: Ruble is at 66.51 to $1, Euro is at 78.39, Brent is at $45.83
http://goo.gl/6uPRFB
As oil prices plummet, Russia plans to cut its budget by 10 percent across all areas - except for military spending.
http://www.wsj.com/articles/russia-f...ref=/home-page
Russian fin minister: cut all expenditure by 10%, except for defense ...cuz healthcare & food is no priority http://www.reuters.com/article/2015/...0KN0Q620150114
Indeed official Russian numbers have to be taken with additional grains of salt after the country is partly on a war footing.
On a different note for some time the Russian government has obviously tried to muster the non-CBR fx reserves for it's delaying actions against the ruble's full. There are still considerable amounts of hard currency left but they have been depleted. Certainly it would be almost as foolish to look just at the CBR reserves (or it's selling rate) as it would be to only take the Russian state debt into account. Lots of countries (re-)discovered that the hard way in recent years.
I also anticipate a strong hit in demand in sectors like cars once the effect of anticipated purchases out of fear of steep price hikes diminishes and credit conditions hit large swaths of the Russian consumers.
Last edited by Firn; 01-14-2015 at 12:19 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
Siluanov: RCB to sell 500bn Rubles of Foreign Reserve Fund (max for 2015)
http://tass.ru/en/economy/771075 …
Sberbank CEO;Oil key factor in Russia's slowdown:
http://tass.ru/en/economy/771076 …
Sanctions ineffective:
http://tass.ru/en/economy/771072 …
Sberbank president German Gref predicting "massive" crisis in Russia's banking industry
http://www.interfax.ru/business/417761
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Russia's ex-PM #Primakov calling for Kremlin's retreat from eastern #Ukraine http://www.kommersant.ru/doc/2645293
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Top European Lending Bank Hit by Russia's Ruble Slide and Ukraine | Business | The Moscow Times
http://www.themoscowtimes.com/busine...is/514397.html
Putin Ally Chemezov to Take Over Aviation Industry | Business | The Moscow Times
http://www.themoscowtimes.com/busine...ry/514393.html
Appears Russia is running out of money these days after they stated they would accept the court decision.
TASS: Russia - Too early to say if Russia will pay in Yukos case justice minister
http://itar-tass.com/en/russia/771232
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