With oil there is something irrational: every day, the new price collapse. Wednesday, April 22, Brent crude fell to $15,98 per barrel. The last time she slid below $16 in June 1999. Thus the futures price of WTI settled at around $10,85. Yesterday the head of Ministry Alexander Novak tied with the lack of demand and glut in the stores. Meanwhile, these epic events together with painful a reaction to them, market participants continue to undermine the ruble. Its rate is close to collapse and yet held only by active sales of dollars by the Central Bank in exchange for the budget rule. Money in the country without exception, but there is no other way.
on Monday, the Central Bank has sent to support the ruble more than $222 million (RUB 16.8 billion) — a record amount since the start of the intervention in the spring of 2020. Prior to that, he twice — on 17 and 20 APR — allocated 14.8 billion rubles, but the ruble exchange rate continued to fall. On April 22 the efforts of the regulator have yielded fruit: in about 30 minutes after opening of trading on Masuria rate stabilized: the dollar and Euro rose in price only 7-10 cents, and after 50 minutes they were cheaper by 40 cents.
Recall that in the “black Monday” on April 20, the price of oil WTI has fallen to negative values, reaching in some point of trading, mark -$40 per barrel. Never before has the world seen such “Alice in Wonderland”, as he described the situation to the newspaper the Washington Post. The fact is that countries can quickly reduce production, the initial volumes of which are focused on growing and not fallen into the crisis of the world economy. The evening of April 21 Royal Vopak NV of Rotterdam, the world’s largest operator of oil terminals, said that reserves storage of crude and refined oil in the world is almost exhausted.
“the Picture in the oil market is extremely grim, says the head of IAC “Alpari” Alexander Razuvaev. — In April, the fall in consumption will amount to 30-35 million barrels per day in may — 25-30 million b/d. In June, the quarantine regime will probably begin to soften, so the fall in consumption may be reduced to 15 million b/d. However, by this time the tanks are filled to the eyeballs.”
According to experts, on average, for the current quarter the drop in demand will amount to 23-25 million b/d, reducing production to 10 million b/d. the Peak levels of imbalance will fall in April and may, during this period, we may see oil at $10 or even lower. Production should be reduced immediately, not 1 may, the date stipulated by the recent agreement by OPEC+. As for the prospects of the ruble, the weakness towards 100 per dollar, just do not allow Central Bank. Although the exit rate in the corridor of 85-90 is very likely.
“By mid-day April 22, oil quotes slightly “bounced”, — says senior analyst “BKS the Prime Minister” Sergey Suverov. — Market participants expect Stran OPEC+ additional production cuts, which is unlikely. To reverse the current trend of a fall can only be one thing — at least a partial recovery of demand. In these circumstances, the ruble is experiencing serious overload, but holds, thanks to more intensive foreign exchange interventions of the Central Bank and tax period. The Central Bank compensates for market in the fall of Urals oil below $25 per barrel. However, the output of the line 80 to the dollar is real”.
In the next two to three months oil prices continue to fall, and OPEC, neither+ nor Russia can not do anything with these objective circumstances to do, says the former Deputy energy Minister Vladimir Milov. According to him, the situation has been brewing for a long time: for many years, the market operates in a crisis of overproduction. And in April, in the midst of a pandemic coronavirus, the players don’t believe in the new agreement, OPEC+, and gave rise to a paradox, as negative prices. They mean that the supplier pays to the buyer, he agreed to take the goods and store them at home.
Apparently, the resulting incident will long be comprehended by the market. It is difficult to realize that the oil has lost all its meaning, writes the American newspaper the New York Times. When on the roads and in the sky — planes affected by the pandemic, economies will no longer need to consume so much crude oil, I agree the Spanish Pais. Negative prices — the best illustration of the depth of the crisis in the oil sector, sums up the British Financial Times.
