Depreciating oil strikes 860 billion hole in the Russian budget

the price of oil, looking, April 20, at the abyss, when a barrel of North American oil of mark WTI fell to an absolutely fantastic reading of minus $40, continued fluctuations in the until recently seemingly impossible level. On April 22, the barrel of WTI cost $11,47, Brent $of 19.27. The oil market in the power “bears” players for a price reduction. How much oil panic is Russia, when and at what price it will end?

that price Thriller April 20 was directly caused by the specifics of the futures contracts on WTI crude oil, known. They recall expired April 21, after which the owner of the contract subject to the obligation to pick up the purchased oil, what bred speculators were not prepared, because of what happened panic selling. But it is clear that the price collapse some futures not explain.

Oil showed the economy mirror, and in it in full growth brought the global crisis with falling demand for oil as well, and other raw materials. Why, the most alarming was just oil mirror? Because the oil age is not over yet, oil remains the most important economic source of energy. Russia is weak, but at least some consolation.

What will happen in the coming days? There are eloquent with your cold-blooded detachment review analysts Sberbank Investment Research 22 April: “this morning the rouble weakened slightly amid continuing sharp collapse in oil prices Brent it fell by 13% and will probably tend to zero in the near future.” Here it is: “Likely to tend to zero”, – looking up from the keyboard, the analyst, perhaps, habitually reached for the Cup of coffee before it gets cold.

But not everyone in Russia can afford that is causing the detachment. A stone falling oil prices is a sprawling hole in the budget revenues. Such losses will be felt by everyone. Edition of the Bell, based on the calculations of an analyst Natalia Orlova from “Alfa-Bank”, gives the following assessment: “assuming the price of Urals in the next two months there will be a $10-15 per barrel (i.e. will remain at the current level. – N. In.), the budget may receive less, in just two months 780-860 billion. For comparison, direct financial support of the government during the crisis, the economists of Alfa-Bank is estimated at 340 billion rubles.”

the scale of the losses is impressive, the crisis, inspired by the coronavirus, are behind the blitzkrieg. However, due to the national welfare Fund Russian budget impact will keep and, for example, according to Sergey Romanchuk from Metallinvestbank, not just survive, but will last at these oil prices for two years.

fortunately, today’s oil prices are hardly long lasting. Economists agree that in the third quarter the global economy begin visibly p��to dramatise. China already emits the appropriate signals. And then wakes up the demand for oil will rise and rates.

the renewal of OPEC+ will start operation on 1 may. Today, observers estimate consistent production cuts as insufficient, it is possible that will require new restrictions, and not only from the OPEC+, steps can be taken within the G20, but the final word remains with the economic recovery.

as for future oil prices, the events are developing so rapidly that predictions can not catch up with them. According to the latest forecast, for example, Wintershall Dea, the average price of Brent crude oil in 2020 will be at $30 per barrel.

the Main Outlook for Russia has already formulated Gaidar, but not a shock therapist Yegor, and his grandfather, a storyteller Arkady: “Us another day stand, Yes night to hold out!”.

In any case, the notch 20 APR will remain forever. And not only in economic history. Yet – in memory and in psychology punters. The market has always been psychology, and the players know from their own experience the truth of Nietzsche, the author’s phrase: “If you look long into an abyss, the abyss also looks into you.” She saw the gaze of the abyss. Beckoning and condemning.