Grimaces of the oil market
Twists of the oil market amaze even experienced businessmen and financiers. We did not expect, they say, that someday we will pray for high oil prices. We thought that low commodity prices are good. Now we pray that low prices disappear. While some are praying, other dealers, who used to sell oil, began to buy it ... Oil-producing Venezuela buys "black gold" from its ideological adversary - the United States.
February 2 «Bloomberg» told something amazing.
It turns out that the growth of the global economy today largely relies on countries rich in oil. With cheap oil, developing countries trading in raw materials become poorer and buy fewer goods, which is why the developed countries suffer from these goods.
Over the past 75 years, recalls the publication, almost every economic crisis was preceded by a jump in oil prices. Now businessmen are worried that low energy prices will lead the world economy into a "spin".
But this is illogical! And yet, this idea is gaining more and more supporters. Journalists explain: in countries rich in oil, the share of consumers and investors is growing. And it is these countries that are now in the clutches of the crisis because of low prices for "black gold". Apple, for example, believes that the decline in sales of its products in the last quarter is due to economic problems in some countries rich in oil.
“I never thought that I would ever want to do this, not to mention the fact that I would really pray for high oil prices, but I do it!” Exclaimed Khan de Jong, chief economist at ABN Amro Bank NV (Amsterdam). According to the expert, the world "badly needs higher oil prices."
It turns out that today the world economy relies much more on developing countries than it was 15 or 25 years ago, that is, in those periods when oil prices were ultra-low. In addition, the United States in the XXI century began to compete with Saudi Arabia and Russia, the largest oil producers in the world. With the exception of China and India, most of the major developing countries today are commodity traders. Such countries currently produce about 40% of the global gross domestic product (according to the International Monetary Fund, their share has almost doubled from 1990 of the year).
The publication indicates that economic growth from Russia to Saudi Arabia, from Nigeria to Brazil, slows down, and even turns into a recession. The IMF and the World Bank are already negotiating with Azerbaijan and Suriname to issue emergency loans to them. Nigeria also asks for money from the World Bank and the African Development Bank.
In fact, it is necessary to talk about "subtracting from global aggregate demand."
Thus, if developing countries trading in oil and other raw materials experience problems in the economy, followed by those developed countries that would seem to enjoy low energy prices. The fall in revenues of oil-producing countries leads to a reduction in their consumption of high-tech western products, which bring large income to developed countries. Capitalists from these developed countries lose profits. As a result, we see a real crisis, when the decline in oil prices affects the global economy, and experts tend to assess this impact in the era of total consumerism and mass buying of iPhones as negative.
Other surprising imbalances in the oil market turn oil traders into oil buyers.
Same «Bloomberg» The following material tells about the new strategy of oil-producing Venezuela: this country now buys "black gold" from the United States.
Petroleos de Venezuela SA has already received a shipment of West Texas Intermediate (WTI) crude oil at the end of January through a terminal on Curaçao, where Petroleos de Venezuela SA has a refinery. Two people familiar with the situation told the correspondent about it.
It was the first oil supply from the USA. Export restrictions on oil were lifted last year, the newspaper reminds.
But how so? After all, Venezuela froze diplomatic relations with the United States, and President Nicolas Maduro often blames Washington for conspiracies to sabotage his government.
It's okay, politics is politics, and oil ties between the two countries remain strong. Venezuela exported about 800.000 barrels of crude oil every day to the USA last year.
But why does Venezuela buy oil?
The problem of the state oil company of Venezuela is that, having access to the world's largest oil reserves, it is forced to use light oil from abroad, with which its oil refineries work, mixing it with heavy oil. In 2015, the company imported about 40.000 barrels per day from various countries, including Russia, Nigeria and Angola (data from Bloomberg).
And here's the result: Venezuelans bought 548.000 barrels of crude oil. This was told to Bloomberg by Matthew Smith, director of research and development company ClipperData (New York). Detailed information about the route and the tanker was given out by two people who had official information and asked the journalist not to call their names. The tanker was loaded with crude oil in the state of Texas.
“Venezuela buys light oil (no matter which one or who) in order to produce gasoline and oil products at its own refineries,” said Reedus financial analyst Dmitry Golubovsky. - The Venezuelan oil refineries, which, by the way, were built by the Americans, and which Chávez nationalized, are designed for a certain type of raw material, namely light oil. They have nothing of their own, all nationalized belonged before the world's leading companies, which rebuilt the production of their raw materials, their technology and their logistics. In this case, it was convenient for them to use light crude oil as a raw material, which is not in Venezuela. ”
In the wake of the shale boom, light oil appeared from the Americans. On the other hand, the Americans also had a hard time.
It turns out that before the shale revolution, American refineries expected to import heavy oil from Canada and Latin America. Their refineries are designed for this very heavy oil. Therefore, the United States, which has established light oil production, has to import heavy oil into the country today and dilute it with its own. This mixture is loaded their refineries.
“Why does the same Eastern Europe buy the Russian Urals despite the fact that the Arabs offer their oil cheaper? Because since Soviet times, under the "Urals" they built factories. This industry has its own chips that are not easy to change, ”Golubovsky said.
What does oil-producing Russia do?
On the eve, oil prices rose above 35 dollars per barrel. The market responds to any messages regarding the situation with the price of "black gold". News on possible negotiations in the OPEC format and Russia with the participation of the Minister of Foreign Affairs of the Russian Federation S. Lavrov has a positive impact on the dynamics of trading.
"As experience shows, namely the events of the end of last week, when on the statements of the government about a possible reduction in production by 5% oil, and after it the ruble showed significant growth despite the news about the growth of fuel reserves in the US, verbal interventions can really significantly affect the market - explained "Utru.ru" Director General of the MFO "Mani Fanny" Alexander Shustov. “But by and large, a“ voyage ”in exporting countries and negotiations with individual market participants are unlikely to lead to the“ oil wars ”between them subsiding and at least a precarious consensus regarding a consolidated reduction in production will be reached. The contradictions between the supplier countries, including those belonging to the cartel, have long gone beyond the confrontation only in the oil market and are increasingly moving into a phase of armed conflict. Nevertheless, statements from the side of Saudi Arabia, including that prices are lower than 30 dollars, are unprofitable even for them and threaten the stability of the market, saying that a compromise is now more than ever necessary. Russia in this case is trying to act as an intermediary, a third party, but it is important to understand that one of the goals of OPEC was to oust independent suppliers, and this is not only the United States with their road to extracting shale oil, but also Russia, which is a major competitor in the European market and continuing eastward expansion. ”
So far, no country is in a hurry to reduce production volumes. According to the latest data, Russia has updated the post-Soviet maximum: in January 2016, the production rate reached 10,878 million barrels per day, which is 1,5% more than in the first month of 2015, reminds Utro.ru.
Russia, most likely, will not go on its own to reduce oil production, and OPEC can withstand any price up to 10 dollars per barrel, according to Cyril Yakovenko, an analyst at Alor Broker. “At the same time, the decisions of the cartel that led to the collapse of oil prices, have not yet reached the goal - the destruction of producers with a high cost of production. Therefore, it’s too early to talk about a long-term price turn up, ”he said.
He is echoed by Vladislav Ginko, a teacher at the Russian Academy of National Economy and Public Administration, who believes that the price bottom of oil will not be felt as long as the nerves play. Whoever does not stand up and goes to reduce oil production will lose market share.
The other day, Russian Deputy Prime Minister Arkady Dvorkovich explained to the general public that the government of the country cannot regulate oil production, affecting its price.
“Russia as a state cannot flexibly regulate oil production, it is a prerogative of companies that operate in our oil sector, and they themselves make investment decisions within the framework of the existing tax regulation system. In this system, there is no government's authority to increase or decrease production volumes, ”Dvorkovich quotes. "Lenta.ru".
Vice Prime Minister believes that oil prices will rise, including due to the decline in world production. True, the official does not know where it will decline: “But it will decline not only in the United States and the countries of the Middle East, or here, I can’t answer this question.”
As for the oil price forecast, the vice-premier said the following about this: “They can fluctuate, but the price of 20-24 dollars per barrel for a year seems unrealistic to me.”
What price would be realistic for Russia? It seems that only one person in the government of the oil-producing country knows for sure: Anton Siluanov. The price is 82 dollars per barrel. He knows another thing: at a price that will be even twice as high as the 20 dollars mentioned by Dvorkovich, Russia finds itself in a long budget minus.
In December last year, Finance Minister Anton Siluanov said that the Russian budget in 2016 could lose less of the order of 2% of GDP revenue, while maintaining current oil prices and the ruble exchange rate.
“The loss of next year’s budget revenues at current oil prices and rates, according to the Ministry of Finance, could be about 2% of GDP,” he quotes Interfax. “This means that in order to fulfill the task of the President’s message - to keep the deficit within 3% of GDP - measures will be needed to mobilize income, a more conservative approach to spending and measures to stimulate economic growth.”
The draft law on the budget for 2016 year provides for the volume of GDP 78 trillion. 673 billion rubles., Indicates the agency. The shortfall in revenue is estimated at around 1,6 trillion. rub.
13 January RIA News" conveyed the words of Anton Siluanov, who spoke at the session of the Gaidar Economic Forum. In his opinion, the Russian budget will be balanced at the price of oil in 82 dollars per barrel.
Here are his words:
However, the 82 dollar - the same price, which can be called "unrealistic." Siluanov understands this. And therefore he says:
Therefore, the endless "adaptation" of the private sector to the "new realities" (very similar to the old realities, they are the same rake) - this is what the Russian people will be doing in the near future. Obviously, the government will also “adapt”, which, in anticipation of obese years, will deal, as we think, with substantial cuts in budget expenditures and will begin to get used to chronic budget deficits — as in Yeltsin's times.
Well, and there, you see, and oil will rise in price.
February 2 «Bloomberg» told something amazing.
It turns out that the growth of the global economy today largely relies on countries rich in oil. With cheap oil, developing countries trading in raw materials become poorer and buy fewer goods, which is why the developed countries suffer from these goods.
Over the past 75 years, recalls the publication, almost every economic crisis was preceded by a jump in oil prices. Now businessmen are worried that low energy prices will lead the world economy into a "spin".
But this is illogical! And yet, this idea is gaining more and more supporters. Journalists explain: in countries rich in oil, the share of consumers and investors is growing. And it is these countries that are now in the clutches of the crisis because of low prices for "black gold". Apple, for example, believes that the decline in sales of its products in the last quarter is due to economic problems in some countries rich in oil.
“I never thought that I would ever want to do this, not to mention the fact that I would really pray for high oil prices, but I do it!” Exclaimed Khan de Jong, chief economist at ABN Amro Bank NV (Amsterdam). According to the expert, the world "badly needs higher oil prices."
It turns out that today the world economy relies much more on developing countries than it was 15 or 25 years ago, that is, in those periods when oil prices were ultra-low. In addition, the United States in the XXI century began to compete with Saudi Arabia and Russia, the largest oil producers in the world. With the exception of China and India, most of the major developing countries today are commodity traders. Such countries currently produce about 40% of the global gross domestic product (according to the International Monetary Fund, their share has almost doubled from 1990 of the year).
The publication indicates that economic growth from Russia to Saudi Arabia, from Nigeria to Brazil, slows down, and even turns into a recession. The IMF and the World Bank are already negotiating with Azerbaijan and Suriname to issue emergency loans to them. Nigeria also asks for money from the World Bank and the African Development Bank.
In fact, it is necessary to talk about "subtracting from global aggregate demand."
Thus, if developing countries trading in oil and other raw materials experience problems in the economy, followed by those developed countries that would seem to enjoy low energy prices. The fall in revenues of oil-producing countries leads to a reduction in their consumption of high-tech western products, which bring large income to developed countries. Capitalists from these developed countries lose profits. As a result, we see a real crisis, when the decline in oil prices affects the global economy, and experts tend to assess this impact in the era of total consumerism and mass buying of iPhones as negative.
Other surprising imbalances in the oil market turn oil traders into oil buyers.
Same «Bloomberg» The following material tells about the new strategy of oil-producing Venezuela: this country now buys "black gold" from the United States.
Petroleos de Venezuela SA has already received a shipment of West Texas Intermediate (WTI) crude oil at the end of January through a terminal on Curaçao, where Petroleos de Venezuela SA has a refinery. Two people familiar with the situation told the correspondent about it.
It was the first oil supply from the USA. Export restrictions on oil were lifted last year, the newspaper reminds.
But how so? After all, Venezuela froze diplomatic relations with the United States, and President Nicolas Maduro often blames Washington for conspiracies to sabotage his government.
It's okay, politics is politics, and oil ties between the two countries remain strong. Venezuela exported about 800.000 barrels of crude oil every day to the USA last year.
But why does Venezuela buy oil?
The problem of the state oil company of Venezuela is that, having access to the world's largest oil reserves, it is forced to use light oil from abroad, with which its oil refineries work, mixing it with heavy oil. In 2015, the company imported about 40.000 barrels per day from various countries, including Russia, Nigeria and Angola (data from Bloomberg).
And here's the result: Venezuelans bought 548.000 barrels of crude oil. This was told to Bloomberg by Matthew Smith, director of research and development company ClipperData (New York). Detailed information about the route and the tanker was given out by two people who had official information and asked the journalist not to call their names. The tanker was loaded with crude oil in the state of Texas.
“Venezuela buys light oil (no matter which one or who) in order to produce gasoline and oil products at its own refineries,” said Reedus financial analyst Dmitry Golubovsky. - The Venezuelan oil refineries, which, by the way, were built by the Americans, and which Chávez nationalized, are designed for a certain type of raw material, namely light oil. They have nothing of their own, all nationalized belonged before the world's leading companies, which rebuilt the production of their raw materials, their technology and their logistics. In this case, it was convenient for them to use light crude oil as a raw material, which is not in Venezuela. ”
In the wake of the shale boom, light oil appeared from the Americans. On the other hand, the Americans also had a hard time.
It turns out that before the shale revolution, American refineries expected to import heavy oil from Canada and Latin America. Their refineries are designed for this very heavy oil. Therefore, the United States, which has established light oil production, has to import heavy oil into the country today and dilute it with its own. This mixture is loaded their refineries.
“Why does the same Eastern Europe buy the Russian Urals despite the fact that the Arabs offer their oil cheaper? Because since Soviet times, under the "Urals" they built factories. This industry has its own chips that are not easy to change, ”Golubovsky said.
What does oil-producing Russia do?
On the eve, oil prices rose above 35 dollars per barrel. The market responds to any messages regarding the situation with the price of "black gold". News on possible negotiations in the OPEC format and Russia with the participation of the Minister of Foreign Affairs of the Russian Federation S. Lavrov has a positive impact on the dynamics of trading.
"As experience shows, namely the events of the end of last week, when on the statements of the government about a possible reduction in production by 5% oil, and after it the ruble showed significant growth despite the news about the growth of fuel reserves in the US, verbal interventions can really significantly affect the market - explained "Utru.ru" Director General of the MFO "Mani Fanny" Alexander Shustov. “But by and large, a“ voyage ”in exporting countries and negotiations with individual market participants are unlikely to lead to the“ oil wars ”between them subsiding and at least a precarious consensus regarding a consolidated reduction in production will be reached. The contradictions between the supplier countries, including those belonging to the cartel, have long gone beyond the confrontation only in the oil market and are increasingly moving into a phase of armed conflict. Nevertheless, statements from the side of Saudi Arabia, including that prices are lower than 30 dollars, are unprofitable even for them and threaten the stability of the market, saying that a compromise is now more than ever necessary. Russia in this case is trying to act as an intermediary, a third party, but it is important to understand that one of the goals of OPEC was to oust independent suppliers, and this is not only the United States with their road to extracting shale oil, but also Russia, which is a major competitor in the European market and continuing eastward expansion. ”
So far, no country is in a hurry to reduce production volumes. According to the latest data, Russia has updated the post-Soviet maximum: in January 2016, the production rate reached 10,878 million barrels per day, which is 1,5% more than in the first month of 2015, reminds Utro.ru.
Russia, most likely, will not go on its own to reduce oil production, and OPEC can withstand any price up to 10 dollars per barrel, according to Cyril Yakovenko, an analyst at Alor Broker. “At the same time, the decisions of the cartel that led to the collapse of oil prices, have not yet reached the goal - the destruction of producers with a high cost of production. Therefore, it’s too early to talk about a long-term price turn up, ”he said.
He is echoed by Vladislav Ginko, a teacher at the Russian Academy of National Economy and Public Administration, who believes that the price bottom of oil will not be felt as long as the nerves play. Whoever does not stand up and goes to reduce oil production will lose market share.
The other day, Russian Deputy Prime Minister Arkady Dvorkovich explained to the general public that the government of the country cannot regulate oil production, affecting its price.
“Russia as a state cannot flexibly regulate oil production, it is a prerogative of companies that operate in our oil sector, and they themselves make investment decisions within the framework of the existing tax regulation system. In this system, there is no government's authority to increase or decrease production volumes, ”Dvorkovich quotes. "Lenta.ru".
Vice Prime Minister believes that oil prices will rise, including due to the decline in world production. True, the official does not know where it will decline: “But it will decline not only in the United States and the countries of the Middle East, or here, I can’t answer this question.”
As for the oil price forecast, the vice-premier said the following about this: “They can fluctuate, but the price of 20-24 dollars per barrel for a year seems unrealistic to me.”
What price would be realistic for Russia? It seems that only one person in the government of the oil-producing country knows for sure: Anton Siluanov. The price is 82 dollars per barrel. He knows another thing: at a price that will be even twice as high as the 20 dollars mentioned by Dvorkovich, Russia finds itself in a long budget minus.
In December last year, Finance Minister Anton Siluanov said that the Russian budget in 2016 could lose less of the order of 2% of GDP revenue, while maintaining current oil prices and the ruble exchange rate.
“The loss of next year’s budget revenues at current oil prices and rates, according to the Ministry of Finance, could be about 2% of GDP,” he quotes Interfax. “This means that in order to fulfill the task of the President’s message - to keep the deficit within 3% of GDP - measures will be needed to mobilize income, a more conservative approach to spending and measures to stimulate economic growth.”
The draft law on the budget for 2016 year provides for the volume of GDP 78 trillion. 673 billion rubles., Indicates the agency. The shortfall in revenue is estimated at around 1,6 trillion. rub.
13 January RIA News" conveyed the words of Anton Siluanov, who spoke at the session of the Gaidar Economic Forum. In his opinion, the Russian budget will be balanced at the price of oil in 82 dollars per barrel.
Here are his words:
“Our budget is balanced at the price of 82 dollars per barrel. That is, there are still a number of decisions to change the budget policy. ”
However, the 82 dollar - the same price, which can be called "unrealistic." Siluanov understands this. And therefore he says:
“Our task now is to bring the budget in line with ... new realities. Because if we said that the private sector more or less adapted to the price of oil around 40 dollars per barrel, this process now continues further in the face of declining oil prices. ”
Therefore, the endless "adaptation" of the private sector to the "new realities" (very similar to the old realities, they are the same rake) - this is what the Russian people will be doing in the near future. Obviously, the government will also “adapt”, which, in anticipation of obese years, will deal, as we think, with substantial cuts in budget expenditures and will begin to get used to chronic budget deficits — as in Yeltsin's times.
Well, and there, you see, and oil will rise in price.
Observed and commented on Oleg Chuvakin
- especially for topwar.ru
- especially for topwar.ru
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