The results of the meeting in Qatar: oil — 30, a dollar — 80
The oil countries could not agree about the freezing of production, which led to the collapse in the currency and commodity markets. Analysts polled by “Tape.ru”, told about how long will the ruble fall why oil prices now depend on the U.S., Iran, and Libya and how to keep savings in terms of exchange rate fluctuations.
Iran sinks the ruble
As expected, the failure of the talks about the freezing of oil production has led to falling oil prices and the ruble.
In early trading on the London stock exchange ICE Brent crude oil fell by almost 5 per cent to 40.5 per barrel. On Friday, April 15 a barrel for the benchmark grade gave more than 43 dollars. Texas crude oil plunged below $ 40 per barrel — up to 39,16. Data on the mixture OPEC hasn’t yet been updated: for information on 15 April, she is 38.05 per dollar.
The market was disappointed with the results of the meeting in Doha. It was assumed that the representatives of oil-producing countries had developed a common position, once they arrived in the Qatari capital. But the negotiations were weird — their first was postponed for a few hours, then six hours were grueling bidding (in the words of energy Minister of Kazakhstan Kanat Bozumbayev). “In General, of course, we expect that we will agree. It seemed to me that I came here to negotiate, not to discuss the necessity of participation in this process even some countries that today are not present”, — has told following the meeting, Minister of energy of Russia Alexander Novak. The stumbling block was the position of Saudi Arabia, refused to sign any treaties without the participation of Iran. And the representatives of the Islamic Republic never arrived in Doha.
BP also started to collapse. The dollar rose by 2 rubles to 68.30, 2.17 ruble to 77,12.
Nevertheless, the negative first hours after the announcement of the results of negotiations came to nothing. By 13:00 Moscow time Brent has edged up to 42 dollars per barrel (but it’s still 2.6 percent lower than at the end of session on 15 April), the us currency fell to 67,37 rubles, uniform European — to 76,19.
Auction on April 18, began with the collapse in commodity and currency markets
Photo: Sergei Fadeichev / TASS
Many analysts predict that the Russian currency collapse: oil prices fall below $ 30 per barrel, and the dollar will punch a mark of 80 rubles. But there is a more reserved forecasts: the effect of the meeting in Qatar will be short and oil prices and the ruble will return to dependence on fundamental factors.
Again 75
The analyst of Raiffeisenbank Denis Poryvai in an interview with “Tape.ru” noted that oil prices have already reacted to the results of the Doha negotiations a significant drop. According to him, the collapse could be even greater if not for the strike of oil workers in Kuwait, protesting against cuts in wages and benefits. This coincided with the summit in Qatar and led to a brief but sharp drop of production in the country — from 2.8 million to 1.1 million barrels per day. Dropped out of the production volume is also in line with an existing surplus on the market.
“Prior to the upcoming meeting (according to the energy Minister of Nigeria Emmanuel IBE cacique the next round of negotiations will take place in June — approx. “The tape.ru”) the main factors for quotations should be data on reserves and production of oil in the USA”, — the expert believes. In his opinion, if the production of shale oil in the United States will not be reduced, then the oil can be dived below $ 30 per barrel.
The current ruble exchange rate reflects the true cost of oil. In the second quarter the weakening of the national currency happens under the influence of seasonal factors — in particular, a lower current account balance (will increase imports, and companies will begin to pay dividends). “We expect that the rate will rise to 70 rubles per dollar toward the end of the second quarter. When falling oil prices to 35 dollars, the U.S. currency will rise to 75 rubles”, — concluded Denis Poryvai.
OPEC members are unable to reach a consensus about the freezing of production, the next round of talks in June. Photo: energy Minister of Bahrain Abdul Hussein Mirza in Doha
Photo: Ibraheem Al-Omari / Reuters
Director of analytical Department of investment company “Golden Hills-Kapital AM” Mikhail Krylov emphasizes that the Doha negotiations have not changed the balance of power in the market. “They do not lead to fracture in the direction of the rising demand and shortage of supply. But nor is that the parties have not agreed about the freezing, no Iranian involvement in this important issue, there was no catastrophe,” he says. And stressed that the pair dollar/ruble is now more dependent on the budget deficit and replenish foreign exchange reserves of the state.
It is important to understand that the state favorable relatively weak national currency. This solves two important problems: support exporters and the economy afloat and allows you to replenish the budget. How the weak ruble supports the state said, for example, Deputy Prime Minister Arkady Dvorkovich and the President of the Bank of Russia Elvira Nabiullina. It is noteworthy that in case of strengthening of the Russian currency, the Finance Ministry intends to deliberately play against it. According to the Minister of Finance Anton Siluanov, the expensive hydrocarbons the extra income direct to reserves that will not allow the ruble to rise strongly against the dollar.
Mikhail Krylov admits that the dollar will rise to 73 rubles. “If there is money not needed for current expenses, it is better to keep them in foreign currency,” he recommends.
“In my opinion, the energy market will play the Doha negotiations in the next few weeks. However market is also important and related factors”, — says the analyst of group of companies “Finam” Bogdan Zvarich. According to him, players will follow the dynamics of reserves and production in the U.S., as well as the increase in oil exports from Iran and Libya.
Both countries are members of OPEC and both attended the talks in Doha on April 17. Tehran intends to increase production to 4 million barrels per day, Tripoli — up to 2 million. There are busy solving their own problems and do not intend to cut the growing production of black gold.
“If these factors will add to the negative on the market, the decline could be lengthy and lead to new annual lows. In the near future Brent crude can go below $ 40 per barrel, which will weaken the Russian currency. The dollar may rise above 70 rubles”, — considers Bogdan Zvarich.
In the near future the dollar may return to the range 70-75 rubles. This will happen if oil prices fall to $ 35-40 per barrel. The cost of oil will be depending on data from the U.S., Iran, and Libya.
