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Russian Car Sales Plunge More Than Forecast Amid Economic Woes

(Bloomberg) — Russian car sales fell 38 percent last month, more than estimated, as the economy contracts and inflation accelerates after last year’s ruble collapse. Sales of new cars and light commercial vehicles dropped to 128,298 units in February from 206,526 a year earlier, the Association of European Businesses in Russia said Tuesday in a statement. That’s the biggest decline since 2009 and follows a 24 percent slump in January. The median estimate of seven economists surveyed by Bloomberg was a decrease of 28 percent. Automakers in Russia are suffering after the ruble weakened 46 percent against the dollar last year, the world’s second-worst performance, and the economy slid to the brink of recession. Car manufacturers are offering discounts or slowing output to counter low demand, with consumers hurting from inflation at 16.7 percent in February, the fastest pace since 2002. The car market probably won’t rebound until 2019 […]

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Balkan States Seek Gas Partnership That May Cut Russian Reliance

“Development of new offshore potential, an LNG terminal, and ensuring interconnected pipelines between countries and into Hungary and Serbia will create real diversity and competition,” Hochstein said. “That is the cornerstone of security. The U.S. will continue to work with all countries in the region to make this goal a reality.” To contact the reporter on this story: Jasmina Kuzmanovic in Zagreb at [email protected] To contact the editors responsible for this story: James M. Gomez at [email protected] Peter Laca

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Chevron Accelerating Asset Sales to $15 Billion on Oil Slide

Signage is displayed at a Chevron Corp. fueling station in Richmond, California. The second-biggest U.S. energy company by market value said its capital spending budget would be $35 billion this year, 13 percent less than 2014. Photographer: David Paul Morris/Bloomberg The shares fell 0.92 percent to $102.99 at 11:46 a.m. in New York. To contact the reporter on this story: Joe Carroll in Chicago at [email protected] To contact the editors responsible for this story: Susan Warren at [email protected] Jim Efstathiou Jr., Steven Frank

Posted On : Published By : Tom Whipple
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French Refineries at Risk as Demand Weakens, Industry Lobby Says

(Bloomberg) — French refiners may close more than one plant as fuel demand weakens, following losses of as much as 3.5 billion euros ($3.8 billion) over the past six years, an industry lobby group said. Should Total SA, which operates five of France’s eight refineries, halt production at one of its sites, more closures would probably follow, Francis Duseux, president of the Union Francaise des Industries Petrolieres, which represents oil companies in the country, told reporters on Tuesday in Paris. “Unfortunately I don’t think it will be finished,” said Duseux, the former head Exxon Mobil Corp.’s French unit. “It will not stop at one refinery except if the state intervenes.” French refineries lost hundreds of millions of euros last year as the 22 euros a metric ton average margin for processing crude was below the break-even level, UFIP said. While Total has yet to unveil details of a refinery […]

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Russia’s energy minister sees crude oil exports rising

MOSCOW (Reuters) – Russian crude oil exports are expected to rise this year and beyond as volumes are diverted away from domestic refineries which are cutting capacity as part of a modernization drive, Russian Energy Minister Alexander Novak said. Novak told Reuters that Russia, one of the world’s biggest oil producers, will maintain its crude oil output at over 10 million barrels per day (bpd), despite some expectations of a plunge in production due to lower prices. He said Russia will continue consultations with the Organization of the Petroleum Exporting Countries (OPEC). Russia will meet OPEC officials in June in Vienna to discuss the impact of shale oil production on global oil markets. Up to now, Russia has been cutting crude oil exports and instead sending much of its crude production to domestic refineries, a move that offers better margins than selling crude to the market at current low […]

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Think of Russia as an ordinary petrostate, not an extraordinary superpower

The Kremlin’s motivation in the Ukrainian conflict has split scholars. Is Russia a greedy state ideologically driven to expand or a declining insecure superpower defending itself against NATO? Realist scholars (for example, see these recent pieces by  John Mearsheimer and Stephen Walt ) argue that the current Russian-Ukrainian conflict was provoked by NATO expansion into Georgia and Ukraine, which were a part of Russia’s strategic zones of influence. The opponents tend to blame Russia for the conflict. To a large extent the divide is methodological: following the publication of Mearsheimer’s piece, Foreign Affairs surveyed scholars on “who is to blame for the conflict?” and discovered that scholars of international relations predominantly mentioned NATO and regional specialists tended to blame Russia. Along with the multiple leaps in the realist argument outlined by Alexander Motyl in his recent Monkey Cage post , it also fails to explain the timing of Russia’s aggression […]

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Obama Said to Resist Growing Pressure From All Sides to Arm Ukraine

WASHINGTON — As American intelligence agencies have detected new Russian tanks and artillery crossing the border into Ukraine in recent days, President Obama is coming under increasing pressure from both parties and more officials inside his own government to send arms to the country. But he remains unconvinced that they would help. Democrats joined Republicans on the Senate Foreign Relations Committee on Tuesday in unanimously pressing the administration to send weapons to Kiev. Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, publicly urged Mr. Obama to consider such a move last week, joining Defense Secretary Ashton B. Carter and James R. Clapper Jr., the director of national intelligence. But the president has signaled privately that despite all the pressure, he remains reluctant to send arms. In part, he has told aides and visitors that arming the Ukrainians would encourage the notion that they could actually defeat […]

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The oil glut and low prices reflect an affordability problem

For a long time, there has been a belief that the decline in oil supply will come by way of high oil prices. Demand will exceed supply. It seems to me that this view is backward–the decline in supply will come through low oil prices. The oil glut we are experiencing now reflects a worldwide affordability crisis. Because of a lack of affordability, demand is depressed. This lack of demand keeps prices low–below the cost of production for many producers. If the affordability issue cannot be fixed, it threatens to bring down the system by discouraging investment in oil production. This lack of affordability is affecting far more than oil products. A recent article in The Economist talks about LNG prices being depressed. LNG capacity ramped up quickly in response to high prices a few years ago. Now there is a glut of LNG capacity, and prices are far below […]

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Everyone Is Guessing When It Comes To Oil Prices

Predicting and diagnosing the trajectory of oil prices has become something of a cottage industry in the past year. But along with all of the excess crude flowing from the oil patch, there is also an abundance of market indicators that while important, tend to produce a lot of noise that makes any accurate estimate nearly impossible. First there is the oil price itself. The crash began last summer, and accelerated in November. Since then, predictions for oil prices for 2015 have been all over the map – from Citigroup’s $20 per barrel, to T. Boone Pickens’ prediction of a return to $100 per barrel. OPEC’s Secretary-General even said prices could shoot up to $200 in the coming years as a result of overly drastic cutbacks and a failure to invest in new production. With those estimates at the extremes, most analysts think prices will continue to seesaw within […]

Posted On : Published By : Tom Whipple