Quote Originally Posted by OUTLAW 09 View Post
Dayuhan--since you do not like comments from social media---then is an official one from the RIA---from the horses mouth but take it with a grain of salt for the following reason--remember I mentioned the Ponzi scheme ie where is the pea under the walnut shell game---there have been some serious Russian economists commenting on the oil price and they indicated a base of 114 was the correct calculating price for the Russian budget purposes up from this figure of 96 and not what was mentioned four weeks ago at a base price of 104.
Anything from official Russian sources has to be taken with multiple grains of salt.

Given the opacity of Russian budget processes, we have no way of knowing what prices they are assuming when they budget. If they are assuming $114, then they are essentially assuming a deficit, because that's way out of line with even the highest estimates. They may very well be doing that: governments routinely run deficits: it's a problem, not a catastrophe, and they can carry it off for a while if they juggle (as most governments do).

"We will monitor the situation and react according to the situation," Siluanov promised, adding that the current decline of oil prices was caused by growth in Libyan oil production and beginning of export of the light crude oil from US.
That's completely off the wall: the US does not export oil. It's illegal to export oil from the US. There's some talk of changing that, but it's still talk at this point.

An unexpected increase in Libyan exports has had an impact on the overall prices, as has greater confidence that Iraqi production will not be heavily affected by the mess there. Relatively small fluctuations in production, even in the hundred thousand bbl range, can have a significant impact on prices.

Analyst consensus still seems to be that the 2014 average will be over $100, and last I looked the 2015 projection was hanging around $105. If they can't balance at that price they'll be in deficit. Will that have any impact on their policies in the Ukraine?

Again, we all know that Russia is corrupt, we all know they have serious problems in their energy industry, we all know that sooner or later this will all catch up and they will have to cope with serious fiscal issues. The question is how any of this will impact their foreign policies. I wouldn't expect much to change: if anything they may get more aggressive. Of course in the long term the possibility of another economic collapse is always there, but that's well out in the future.