The price of the European grades of oil on the spot market after a two-month break has risen above $30 per barrel. Three weeks prices have risen almost five times. The rapid rise contribute to a stronger drop in output than was negotiated in the framework of the April transactions OPEC+, and a fairly quick recovery in demand for raw materials in Europe and China. However, the rising prices of raw materials had almost no effect on the exchange rate, the movement mechanism is offset by the sale of foreign currency in terms of the budget rules.Friday, may 15, the price of the European grades of oil for the first time since mid-March has risen above $30 per barrel. According to Reuters, the price of North sea Brent crude oil on the spot market rose to $30,3 per barrel, the highest level since March 16. The two-month maximum has updated the price of Russian Urals, which amounted to $30,96 per barrel. The prices have stayed at levels of 4.5–4.8 percent higher than the closing Thursday for the week they rose by 17.8 to 35.7 per cent.With the beginning of the month launched a new deal on OPEC+, suggesting the reduction of daily oil production to 9.7 million barrels in may—June. However, some countries have gone further and announced plans to further reduce production. For example, Saudi Arabia announced Monday that it will reduce production by 1 million barrels per day more than her proper quota, to a level of 7.5 million barrels. Followed by UAE and Kuwait announced that collectively will cut production by 180 thousand barrels per day, in connection with this, a reduction in OPEC+ in June could reach 10.8 million barrels instead of the planned 9.7 million barrels. According to the International energy Agency, the sharp decline in production by Saudi Arabia and the decline of oil production in the US and Canada will result in a historic decrease in world oil supply in may by 12 million barrels per day to 88 million barrels, the lowest in the last nine years.According to the chief macroeconomist of the Julius Baer Norbert Ruecker, transportation activity, which accounts for the lion’s share of oil, in the leading Western economies is close to 80% of the normal level, and in China seems to have returned to crisis levels. In such conditions, the IEA expects a fall in daily oil demand will not be 9.3 million and 8.6 million barrels, and it will be of 91.23 million barrels. “Follow the official statistics of the U.S. oil market to estimate trends on the demand side, and a set of data this week confirms its recovery”,— says Mr. Ruecker.In such circumstances, market participants do not exclude further growth of oil prices. According to Norbert Ruecker, the upcoming stage of reducing the oversupply should push prices to increase to $40 per barrel and higher by the end of the year. However, market volatility may persist, especially as you get closer to the date of expiry of the next futures contract, as the storage is still almost full. “Closer to expiry at the end of may next contracts can start to decline in price, which can cause a rollback and far futures contracts”,— said the head of the Department experts on the stock market “BCS” Vasiliy Karpunin.However, the recovery in oil prices almost no impact on the Russian currency. According to the results of the main trading Friday the dollar on the Moscow stock exchange closed near the mark is 73.72 RUB/$, which is 24 kopecks. above the closing values on 32 kopecks. higher than a week ago. According to the chief economist of Sovcombank by Kirill Sokolov, the fiscal rule and the additional foreign exchange intervention the Bank of Russia reduced the dependence of the ruble on the oil price. “The global economic recovery and oil demand will be gradual. In the absence of external shocks the ruble against the dollar in the coming months will be stable in the range of 72-77 RUB/$,”— said Mr. Sokolov.Vitaly Gaydayev
