Ten dollars a barrel?
Tom Randall (Tom Randall) website «Bloomberg» warns: oil prices may fall to the lowest level in the last 45 years. Or maybe even lower.
Morgan Stanley experts predict a price level reminiscent of the 1986 performance of the year: price cuts will remind "some of the worst oil slumps over the past three decades," the author points out. Experts at Morgan Stanley gave a very pessimistic outlook for oil prices in 2015.
Banking experts remind the public that, until now, confidence in the recovery of the oil market has been rather high. This confidence was supported by four predictable factors. However, the forecast came true only on 75%, and this is what prompted analysts to "pessimism."
Earlier it was predicted that the demand for "black gold" would grow. Theoretically, the reason for the growth in demand was to be just the fall in prices. Cheap oil means cheap production, cheap transportation and an increase in the number of road trips in the summer. And so it happened: despite the slowdown in the Chinese economy, global demand has indeed increased - by about 1,6 million barrels per day, on average, compared to the 2014 of the year.
It was also predicted a reduction in investment in oil production and production. And so it happened: low oil prices forced energy companies to cut all sorts of expenses. Since October 2014, the number of active drilling rigs in the world has decreased by about 42 percent. More 70.000 oil workers lost jobs. According to estimates, in the 2015 year, oil companies will reduce their capital expenditures by approximately $ 129 billion.
In such circumstances, the value of shares of oil companies should remain low. Yes, it did: the papers of major oil companies are trading "near 35-year lows."
Finally, a drop in oil supplies was predicted, against which the market will then recover. But in practice, the opposite happened: the total supply increased, despite the reduction in supply from the United States. Analysts point out here at the negative policy of OPEC (talking about exceeding its own quotas. - O. Ch.).
Because of such a significant discrepancy between previous forecasts and reality, and theories with the practice of analytics at Morgan Stanley Research were at a crossroads.
On the one hand, Morgan Stanley adhere to its initial hypothesis: prices can and grow - mainly because OPEC has no more free capacity, and oil storage tanks are full to capacity. On the other hand, Iran is about to enter the game. In addition, the situation in Libya may improve. Finally, analysts at Morgan Stanley admit that production in the US "can also be revived."
At the same time, experts are convinced that the recession that has begun does not have any prospects for a quick recovery, as it was before. Therefore, a new recession may last for three or even more years and be "much worse than in the 1986 year."
Recall that the reason for the fall in world oil prices in 1986 was the most common overproduction of "black gold". At the beginning of the 1980's the average price of a barrel of oil was about $ 36, and in 1986, its extreme values fell below $ 10 (in nominal value; in real, that is, adjusted for inflation, 1986 should be multiplied by about two). The average value in 1986 was about 14,5 dollars per barrel of Brent. In 1987-1989 (years of "perestroika" in Russia) the price was kept at the level of 14 with a tail - 18 with a tail of dollars per barrel. In the span of 1990-1999. average values made up from 23,19 to 16,56 dollars per barrel. As a result, exporting countries suffered the largest financial losses. The USSR and its market Russia suffered from an inadequate inflow of solid "oil and currency". Some experts believe that low oil prices contributed to the collapse of the USSR, as well as crisis phenomena in the Russian Federation during the Yeltsin era. The rise in oil prices began in the first year of Vladimir Putin’s rule. Fast growth was typical for 2004-2008, then prices began to fall again due to the global financial crisis. But the fall was not as critical as it is today. And already with 2010, a new rise in prices began - rapid. However, in 2014, it was replaced by a new recession. Recession, which experts tend to consider protracted.
What to expect in this situation, the Russian economy?
RBC cites the opinion of the director for emerging markets “Morgan Stanley Investment Management” Ruchira Sharma. He believes that a long winter expects a Russian economy dependent on oil and gas.
In an interview with Bloomberg, Sharma noted that investors who returned to Russia after the collapse of the stock market in the 2014 year began to leave again. The reason for the departure was the next drop in oil prices and the weakening of the ruble. For example, the Russian asset management division of the French bank BNP Paribas was sold, the Markton Mobius Templeton Russia and East European Fund was liquidated.
An additional blow to prices, and hence to the oil sector of the Russian economy, and its budget, is Iran’s behavior. Sanctions on him have not yet been lifted, but the statements of his officials have already swayed world prices for "black gold".
In mid-July in the press appeared Statement by Mohsen Kamsari, Director for International Relations of the Iranian National Oil Company NIOC. He said that the IRI, as stipulated by the terms of the deal with international intermediaries, intends to at least restore its share in the European market - in the amount from 42 to 43%, which the republic had before the imposition of sanctions. Earlier, the same Kamsari declared that Iran was ready to immediately begin deliveries of crude oil to Europe.
In mid-January 2015, Russian Finance Minister Anton Siluanov, speaking at the Gaidar Forum, saidthat budget revenues in 2015 year, with the average price of oil 50 dollars per barrel will fall by 3 trillion. rubles.
Olga Tanas (Olga Tanas) in «Bloomberg» cites the opinions of several experts on the future of the Russian economy.
For the economy, the author writes, which exists solely on the basis of the price of crude oil, another recession in the world oil market may mean the longest crisis in the past two decades.
The collapse of prices "will test for strength" the optimism of President Vladimir Putin, who recently said that Russia has left behind the worst stage of the economic crisis. The oil recession will put pressure on the “regime”, the author writes, and on the eve of the early parliamentary elections next September.
“Next year, Russia will face recession or stagnation,” if the price of oil is about 50 $, says Dmitry Polevoy, an economist at ING, a Moscow-based financial corporation, to whom Olga Tanas addressed via e-mail. As a result, according to Polevoy, “it will probably be necessary to cut budget spending even more, put off part of military spending and use what remains in the Reserve Fund.” The decline in oil prices also means that Russia may come to the need to receive "financing" from the National Welfare Fund.
“For Russia, a steady further decline in oil prices is likely to further weaken the ruble and undermine the recovery of the economy and government finances,” say experts at Moody's Investors Service in a recent report. The importance of oil in the Russian economy is great: after all, according to estimates by Moody's Investors Service, from 17 to 25 percent of gross domestic product is associated with the energy industry.
"Exit from the recession is postponed until the 2017 of the year," analysts of Sberbank, led by Yulia Tseplyaeva, concisely predict.
Some Russian analysts do not believe in gloomy forecasts.
“The fall in oil prices to 10 dollars per barrel as a forecast, I would not take seriously at all. If only because 10 dollars in 1986 and 10 dollars are completely different money now, ”the newspaper said. "Sight" Valery Polkhovsky, Senior Analyst, Forex Club Group.
“It’s bad to imagine how the imbalance between supply and demand, even in 2,5 a million barrels, according to Morgan Stanley, with global consumption of 93 a million barrels per day can provoke a drop in oil prices by 90%,” says Polkhovsky. - Moreover, who and how will produce and sell oil at such prices ?! Shale miners seem to be brave, but with the average annual price of 55 dollars, they have already reduced drilling volumes by 50%. Most of their shares are listed on 50-60% below 2014 of the year. ”
“In 2015, the average annual price of oil will be around 55, but a decline to 50 is possible. If we consider a longer horizon, for example, two or three years, then we expect that oil will cost around 70, ”predicts Polkhovsky.
The weighted forecast was issued by Sergey Pravosudov, director general of the National Energy Institute. However, he does not exclude the “oil shock” scenario for the Russian economy (price falls to 30 dollars per barrel).
“Theoretically, of course, anything is possible,” he said. "Free Press". - But in the long term, the price of oil in the $ 30-40 area per barrel can hardly last more than a year. During this time, low-profit oil production projects will be knocked out of the market. First of all in the same USA. This means a decrease in supply in the market, which automatically corrects upward demand. As a result, a new equilibrium price point will be reached. ”
They tried to calm the Russians and at the government level. True, with reservations and verbal "fog".
The head of the Ministry of Economic Development, Alexei Ulyukayev, said on the Russia 24 channel that the ruble will be “within its fundamental values” if “no force majeure circumstances connected with any additional turbulence in the global capital market interfere , with non-fulfillment by sovereign borrowers of their obligations, sovereign or corporate defaults. " However, he further noted, wrote "Lenta.ru"that the main factors determining the ruble exchange rate are the cost of oil and the balance of payments: “We see that there is a decline now: now 54 is the current price of a barrel of our oil, the average annual is 57. If the dynamics are the same - 57 will remain or so, then the exchange rate ratios will be approximately the same as we are seeing today. ”
In short, this is an open official admission that the ruble in Russia is “converted” only into oil. There can be no other way - with the raw material distortion of the economy, “embedded” in the world economy with oil and gas.
In conclusion, we present the opinion of the leading analyst of the National Energy Security Fund, Igor Yushkov, who answered the questions "Free Press". As we see it, Yushkov clearly and briefly described the possible financial consequences of the new collapse in prices for the citizens of the country. Quote:
The main victims in this stories there will be a Russian population whose standard of living will decrease significantly. If you import a lot of consumer goods, it is natural that with the weakening of the ruble they will increase in price. If you do not offer an equivalent replacement, people will have to abandon the purchase of some of the goods. ”
To refuse to purchase a part of the goods sounds optimistic. We will assume that the crisis in Russia will come only when citizens refuse to purchase goods at all.
Information