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Ruble Poised for Record Month as Oil Gains Trump Ukraine Concern

The skyscrapers of the Moscow International Business Center on Oct. 28, 2014. (Bloomberg) — The ruble rallied for a second day, extending its biggest monthly increase on record, while Russian stocks and bonds gained as oil climbed and a cease-fire in Ukraine showed signs of holding. The currency rose 1.4 percent to 60.5470 per dollar by 12:08 p.m. in Moscow, taking its advance in February to 15 percent. Crude oil, Russia’s main export earner, is trading near its highest level this year, while Ukraine signaled that the cease-fire struck this month may endure. “Oil rallies and so does the ruble,” Dmitry Polevoy, chief economist for Russia and CIS at ING Groep NV in Moscow, said in e-mailed comments. “The geopolitical concerns have mostly been priced in, and to move the ruble considerably weaker, any new economic sanctions must be much tougher than what they are right now in reality, […]

Posted On : Published By : Tom Whipple
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Seven Russian banks downgraded by Moody’s

Moody’s downgrades ratings for seven Russian banks, including the financial arm of energy company Gazprom. Photo by Denis Larkin/Shutterstock The downgrade for Sberbank, Bank VTB, Gazprombank, Russian Agricultural Bank, Agency for Housing Mortgage Lending, Vnesheconombank and Alfa-Bank follows a lowering by Moody’s of the government debt rating to Baa3, the lowest investment grade rating, last week. Moody’s said it also lowered the financial strength ratings of Sberbank, Bank VTB, JSC , Gazprombank and Alfa bank. "This is due to Moody’s expectation that the prolonged recessionary environment in Russia will produce a very challenging operating environment for the country’s leading banks and thereby impact their financial fundamentals," the ratings agency said in a Tuesday profile. Standard & Poor’s and Fitch Ratings each lowered their ratings for Gazprombank and others earlier this year. The financial arm of the Russian energy company is the subject of sanctions imposed in Russia in response […]

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EU Seeks Meeting on New Ukraine-Russia Gas Dispute

ENLARGE A man boils water on an open fire in the town of Svitlodarsk in eastern Ukraine, where shelling has destroyed gas supply infrastructure. Moscow and Kiev are quarreling about who is responsible for supplying and paying for gas to Ukraine’s rebellious east. Photo: Associated Press BRUSSELS—The European Union is trying to convene a three-way meeting with the Ukrainian and Russian energy ministers to resolve the conflict over gas supplies to the separatist-controlled areas in eastern Ukraine. Speaking at a news conference in Brussels on Wednesday, European Commission Vice President for Energy Union Maros Sefcovic said he has proposed that the issues of supplies and the cost of gas for the rebel-held Donetsk and Luhansk territories in eastern Ukraine be treated independently of a winter gas supply package. That agreement between Moscow and Kiev was brokered by the EU in late 2014. “I believe that this question, of course, […]

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The Siberian crater saga is more widespread — and scarier — than anyone thought

A member of an expedition group at the edge of a newly formed crater on the Yamal Peninsula in northern Siberia on Nov. 9, 2014. (Vladimir Pushkarev/Russian Centre of Arctic Exploration via Reuters) At the end of last summer came news of a bizarre occurrence no one could explain. It was a massive crater that just one day showed up. Early estimates placed it at nearly 100 feet in diameter, nestled deep in Siberia’s Yamal Peninsula, a place called “the ends of the Earth.” The saga deepened. The Siberian crater wasn’t alone. There were two more, ratcheting up the tension in a drama that hit its climax as a probable explanation surfaced. Global warming had thawed the permafrost, which had caused methane trapped inside the icy ground to explode. “Gas pressure increased until it was high enough to push away the overlaying layers in a powerful injection, forming the crater,” […]

Posted On : Published By : Tom Whipple
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Is the US Overplaying Its Energy Hand?

Poker game image via shutterstock. Reproduced at Resilience.org with permission. In the grand poker game of geopolitics, energy is often the wild card. That’s why the Middle East is such a mess: Great Powers (first Britain, more recently the United States) have been installing, propping up, toppling, threatening, or bribing regimes in that region — almost always to the detriment of indigenous populations — ever since the first oil discovery there  prior to World War I . Oil and natural gas interests are clearly implicated in current turmoil in or around Libya, Iraq, Syria, and Iran—and also Ukraine. In each instance it requires some historical context to understand the peculiarities of the situation; let’s focus for a moment on the last of these countries. Ukraine has long been a transit route for Russian gas destined for Europe. The fact that Russia is an energy superpower is frustrating to Anglo-American […]

Posted On : Published By : Tom Whipple
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Oil: Shocking how vital it still is

Oil: Shocking how vital it still is thumbnail The idea is a pretty simple one. Every now and again – amid all the swirling reports and breaking news – it is worth taking a pause and bringing together what we know about the most important resource in the world. As part of the Big Oil Drop project , I was asked a straightforward question. “Why is oil so important? And could you write about it.” It was so straightforward a question that it sounded faintly ridiculous. Well, of course oil is important, I blustered, erm, we need it to drive in our millions of cars, jobs depend on it, the supply of energy is at the heart of much of global politics (just look at Russia now), wars are fought over it, without oil the lights would go out… I tailed off, realising that yes, of course, I knew […]

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Brent inches up toward $59 on Fed flexibility, China factory growth

SINGAPORE (Reuters) – Brent crude edged up toward $59 a barrel on Wednesday, helped by better-than-expected Chinese factory activity data, the Federal Reserve’s flexible stance on U.S. interest rates and the euro zone’s approval of reforms proposed by Greece. But U.S. crude was weaker after settling lower for the fifth consecutive session on Tuesday on the back of a bigger-than- anticipated crude stock build-up. Brent had climbed 11 cents to $58.77 a barrel by 0751 GMT (2.51 a.m. EST), while U.S. crude futures fell 17 cents to $49.11 a barrel. China’s factory sector showed marginal expansion, according to the flash HSBC/Markit Purchasing Managers’ Index, which inched to a four-month high of 50.1 in February, just above the 50 level that separates growth in activity from contraction. A Reuters poll of economists had forecast a reading of 49.5. "That’s good news (as it means) potential oil demand, but I think […]

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Oil Prices Slip on Expected Rise in Supplies

ENLARGE The silhouette of pump jacks is seen on the site of an oil well outside Williston, N.D. Photo: Bloomberg News Oil prices slipped on Tuesday as traders fretted about the unrelenting growth in U.S. crude stockpiles. Analysts expect inventories to rise for a seventh straight week, extending their already record level. U.S. oil supplies likely rose by 4.7 million barrels last week, according to the consensus average forecast of 11 analysts surveyed by The Wall Street Journal. Light, sweet crude for April delivery settled down 17 cents, or 0.3%, to $49.28 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 24 cents, or 0.4%, to $58.66 a barrel on ICE Futures Europe. Prices had been higher for most the day, but a late-session decline made it a five-session losing streak for U.S. oil and back-to-back losses for Brent. “This crude market is like Sisyphus. […]

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Libya’s Largest Oil Field Shut Down Again on Power Failure

Libya’s largest oil field was shut down again Tuesday after heavy rain led to a power failure, a Libyan oil official said. The Sarir oil field had resumed oil flows on Sunday after repairs were made to a pipeline blown up by militants a week earlier. The field normally pumps 185,000 barrels a day to the eastern Libyan oil port of Hariga. The official estimated that the field would begin pumping again in a few days. Write to Benoît Faucon at [email protected]

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Kerry Defends Nuclear Talks With Iran

WASHINGTON—Secretary of State John Kerry defended international nuclear negotiations with Iran, saying the U.S. expects to know soon if Tehran is willing to agree to an “acceptable and verifiable plan” to curtail its nuclear program in exchange for sanctions relief. As a key deadline for a framework agreement nears and Israeli Prime Minister Benjamin Netanyahu is set to address Congress about his reservations next week, Mr. Kerry said the U.S. understands allies’ concerns and would explain an eventual agreement to them, should negotiators reach one. But he stressed there is no deal in hand and that no terms are final. “Anybody running around right now, jumping in to say, ‘Well, we don’t like the deal,’ or this or that, doesn’t know what the deal is. There is no deal yet,” Mr. Kerry said. The U.S. goal in the talks is to ensure “Iran will not get a nuclear weapon,” […]

Posted On : Published By : Tom Whipple