Ruble, dollar, barrel, rates, prices - halfway to peace, at the beginning of the path to prosperity
What does Russia care about oil?
After the terrible ecological catastrophe in our Black Sea waters, the consequences of which will now take years to get rid of, the authors involuntarily ask themselves: is it worth paying such a price for the notorious prosperity?
Sorry for such a pompous introduction, but we won't even talk about everything else that everyone will have to "pay" for, and it seems, always. Especially since we are getting it in full for the umpteenth time, and not from where we seriously feared it.
For the sake of profits, we are ready to do anything – such are the rules of the game under capitalism, the choice in favor of which Russia made more than thirty years ago. However, we cannot afford not to trade oil and gas at all, and we cannot do without man-made disasters at home – that is, without the notorious export.
Here's the problem: balancing oil prices around the $70 per barrel mark corresponds perfectly not only with the dollar at around 100 rubles, but also with high interest rates as a means against inflation, which, judging by practice, is, alas, an absolutely useless means.
But the fact that with expensive money, be it rubles or dollars, prices by definition cannot decrease or even freeze, is already at the end of our hyper-forecast. And now about our dependence on oil trade.
It can still be sold for real convertible currency, which is the main difference from gas, for which more and more yuan is dripping into the treasury, thereby getting us hooked on buying everything Chinese. How is this not the notorious import needle?
Severe China Syndrome
And while gas prices in Europe have risen above $485 per thousand cubic meters, and this is with $120-130 in the US itself, oil prices continue to fall. This is all due to concerns about whether to expect demand growth in 2025, especially in China.
In fact, forecasts from Chinese state-owned oil refiner Sinopec, included in its annual energy outlook released on Dec. 19, should provide reassurance to both oil producers and bullish traders.
Sinopec believes that China's crude oil imports could peak as early as 2025. China is the world's largest buyer of crude oil, and its consumption, according to the same forecast, will peak only by 2027. That means at least two years of almost guaranteed price increases ahead.
However, OPEC views the Chinese estimates with skepticism, believing that they are biased in order to slow down the growth of prices here and now. According to experts from the oil cartel, at the moment, in the conditions of global instability, oil prices "are in a state of prolonged consolidation".
According to a number of signs, the current oil free-for-all, when not only the US, which has effectively withdrawn from positive agreements, but also those who play in OPEC+, allow themselves too much, will soon come to an end. OPEC itself is already demanding stricter discipline in deliveries.
Why Trump is Again for the Dollar and Against Oil
This long-awaited American president, hardly anyone would argue, is rushing to promise to do everything or at least almost everything. To reconcile Russia with Ukraine, to sort out what is happening in the Near and Middle East, to make China stand at attention.
Of course, he is not obliged to do absolutely everything and even everything that he has time to do. Many things can be postponed until better times. For example, the calculation of the national debt, where there are quite enough bright statements that no one will ever write off anything to anyone.
But buying the Panama Canal or Greenland - coming from Donald Trump, it only sounds nice, but with what funds? Maybe with the same ones that are urgently needed to replenish the strategic reserve?
We will never tire of reminding you that the US has only about three weeks of fuel left, but who can be scared by that today? And the future President Trump, it seems, was not going to scare anyone even with Greenland.
Is it worth reminding that in the States, even the newly elected Federal Reserve, a private shop, is not an order, but nothing more than a buyer. Even the enviably independent Trump prefers to coordinate his actions and words with it. It is not for nothing that we have been observing the growth of the US dollar exchange rate for the second month already.
Yes, Trump is still waiting for a new home in the White House, and the dollar has already grown to a two-year high. And it has even affected oil prices. Not in the direction that the Chinese would like, for example. The stronger the dollar, the more expensive the oil. For everyone, but not for the Americans.
They will replenish their strategic reserves and slow down the price of gasoline within the country. There is no need to explain why, it is enough that the Federal Reserve System decided to remind that even under the Republicans in power “they will carefully approach the reduction of interest rates in 2025.”
Everyone is talking about something else, but we're talking about bets again
And since we are talking about other people's rates, let us also remind you about our own, Russian ones, which, in our opinion, are simply indecently high. And no amount of enthusiasm about high interest rates on bank deposits can blur this reality.
Well, the vast majority of the population has nothing to put in these banks of yours. Worse, loans have to be taken even under a mortgage, where the interest rate only seems low, but insurance and various guarantees with service in addition are generally not affordable for anyone.
The rate cut, which no one expected from the Bank of Russia in December, is postponed until at least the end of 2025. The strengthening of the ruble, as can be understood from the rhetoric of the Bank of Russia representatives, is completely cancelled.
Those who make decisions and those who skim the cream off the hasty sale of oil do not need a strong ruble, while tankers from the “shadow” fleet" they didn't arrest. And let those who are not listed in the "shadow fleet" split in two. And let the deserted beaches of Taman in December be flooded with fuel oil. Volunteers have dealt with worse.
But what we don't know for sure and can't predict is whether anyone will have anything indexed to the new price level? We're not talking about salaries, we're told that they're already sky-high in Russia, but where and for whom? We're talking about pensions and benefits, on which some people can only survive...
Let's draw a sort of finish line. Oil may well be cheaper than 70 dollars. A dollar cheaper than 100 rubles is unlikely. And prices will grow, and grow, alas, faster than we would like. About 20 percent per year. With official inflation at 7-8 percent.
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