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Saturday, December 3, 2016

Iran lowered the Russian currency


Optimistic forecasts, made on the eve of the may holidays that “black gold” will grow to $50 per barrel, has failed. Oil fell back from $48 to below $45. The matter is that Iran, which increased its daily production to 3.8 million barrels and exceeded the pre-sanctions level of production. Russian money, the rate of which depends mainly on quotations for raw materials, the first day of trading after Easter and “may day” failed to 66.17 rubles to the dollar (minus 1,84) and to 76.05 rubles (minus 2,75) per Euro. Some experts suggest that this is not the limit and soon green will exceed 70 rubles. But finally to panic early. Analysts of the International energy Agency believe that the rise in oil prices is not far off. The bandwagon the dollar can supply other world currencies, which declared “the American war on all fronts”.


photo: Gennady Cherkasov

May holidays, participants of the Russian trading floors, as commodity and currency, met in a great mood. At least, those who bet on increasing oil prices and the stability of the Russian currency. Reason to believe that the price of “black gold” make it to $50, there were several. First, according to the Deputy Director of analytical Department of Alpari Anna Kokoreva, the economic situation in the US is far from perfect, but the statistical indicators do not reach the target levels. Because of this Federal reserve service postponed the rise in interest rates, hit the dollar. Commodity markets from the decision of monetary authorities won, as after the weakening of the “green” raw material prices nominated in that currency, climbed up. The barrel, for example, jumped above $48.

Additional support to oil quotations was rendered by the report of U.S. Department of energy, according to which the production of “black gold” in the States has declined. The Ministry predicts that oil production in the United States will continue to fall, despite the increase in production in the Gulf of Mexico.

But it turned out differently. Tehran has announced that it has increased production to 3.8 million barrels per day. This is actually more of what has made Iran to expand sanctions against it in 2012, when oil production within 3 years fell to 2.7 million barrels. Oils in fire has added Saudi Arabia, which has threatened in the coming weeks to ramp up production to 10.5 million barrels per day.

Barrel, respectively, rolled down. Now the barrel has returned to the level of $45, but there are risks that it will fall again to $40. The dollar then will exceed 70 rubles and it will still be a good outcome.

But it is hoped that this will not happen. At least, indications that we will not see such a scenario, are present.

According to the head of division-oil industry and markets the International energy Agency Neil Atkinson, ahead of the oil market expect a “rainbow days”. “We believe that the market is close to balance, and I think that in 2017 it will come. This means that oil prices will gradually recover”. In addition, according to him, the production of shale oil in the US continue to fall.

In addition, adds confidence and that in early may, most world powers announced a “week of international solidarity of the currencies against the dollar.” “Green” has fallen against all major currencies Old and New world, Asia and even the hryvnia and tenge. The growth rate of US GDP for the first quarter slowed down. According to the head of the fed Janet Yellen, the economic growth in the United States is not so certain to tighten monetary policy.

It is negative for the dollar and positive for other currencies.

In the Old World, bad news from the States contributed to the success in the “struggle” of “American”. In the UK, came out positive data on GDP in annual terms they grew by 2.1%. In the end the British pound, up 0.35% against the dollar, although its earlier momentum was weak.

In Germany the inflation rate for April declined by 0.2%, which allowed the Euro strengthened for the week by 2% against the dollar.

The Bank of Canada Governor Stephen Poloz was optimistic on the prospects for the world economy, in particular, in their country. In this statement the canadian dollar also went into the “green zone”, and the dollar was lower against the loonie.

In Japan, released statistics for March. The index of industrial production there grew by 3.6%, beating expectations of investors. Personal expenditure declined by 5.2%. Japan’s jobless rate in March was 3.2%, being better than expectations. Against the dollar, the yen strengthened to a record last time was 4.2%.

Only, what will happen in the future with the Russian currency is still unclear. Thus, Citigroup analysts expect the dollar by year-end will cost 70.5 rubles (it’s better than before, when forecasters predicted the Bank of 73.6 rubles).

The same assumption from Bloomberg, but the Agency claims that such a rate will be reached by mid-year. As UBS experts, who say that after 3 months the dollar will be 73 rubles.

However, the world Bank estimates that the oil speculators are playing on the increase in prices of “black gold”. If you remember that, experts believe that speculators are the main determinants of the quotes, we can assume that the collapse of a barrel to $40 is not going to happen. Encourage growth of prices for “barrel” will be a decline in US production, the seasonal increase in demand for fuel and the Asian factor — the increase in imports of raw materials from China.

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