Category:

Russia Bows to Cheap Oil as Putin Aide Sees $50 Price for Budget

Russia will assume that crude prices will stay near their present level in calculating next year’s budget as the world’s largest energy exporter adjusts to a downturn on the oil market, according to President Vladimir Putin’s top economic aide. The budget will be based on an average oil price of $50 a barrel, Andrey Belousov told reporters in Vladivostok on Friday. Putin said he’s asking parliament to support a shift to a one-year fiscal plan in 2016 because it’s “impossible” to predict the direction of global markets. Non-OPEC member Russia, whose currency has plunged 45 percent in the past 12 months, is growing resigned to slumping oil, which together with gas accounts for about half of budget revenue. The country is seeking to cooperate with members of the 12-member Organization of Petroleum Exporting Countries to stabilize the market after the Finance Ministry said that the turmoil is forcing Russia […]

Posted On : Published By : Tom Whipple
Category:

Russia may produce 700 million tonnes of oil, export 300 bcm of gas to China

Russia can increase its oil production to as much as 700 million tonnes of oil per year (14 million barrels of oil per day) and export 300 billion cubic meters of gas to China annually, Rosneft Chief Executive Igor Sechin said on Friday. Speaking at the Eastern Economic Forum, Sechin added that production costs for Russia’s largest oil fields were lower than for its global peers. A weak ruble is offsetting low oil prices for Russian oil producers. (Reporting by Katya Golubkova; Editing by Richard Pullin )

Posted On : Published By : Tom Whipple
Category:

Gazprom seals big gas deals in Europe despite Ukraine crisis

People walk out of an underground crossing, with the company logo of Gazprom company installed on its office building, in Moscow, August 10, 2015. Russia’s Gazprom has bolstered its industrial presence in the heart of Europe with two major gas deals that were announced on Friday despite ongoing tensions with Moscow over the conflict in eastern Ukraine. The first of the deals, an asset swap with German chemicals group BASF that gives Russia greater access to gas trading and storage in Germany, was a surprise as the companies had abandoned it only nine months ago, citing a "difficult political environment". Pressed on what had changed since, BASF declined to respond directly. Its oil and gas production unit Wintershall, which will secure more stakes in Siberian gas fields under the swap, said only that it was convinced that Russian natural gas would help ensure energy security in Europe. The second […]

Posted On : Published By : Tom Whipple
Category:

China buys Russian crude oil to ensure supply security: CNPC chairman

Buying crude oil from Russia allows China to ensure security of supply as cooperation between the two countries is likely "to gain new momentum," China National Petroleum Corp. Chairman Wang Yilin said Friday. Speaking on the sidelines of the Russian 1st Eastern Economic Forum in Vladivostok, Yilin said that while China was looking to diversify its crude oil sources, imports were mainly via sea routes. "Russian crude could be delivered via overland pipelines. This provides security for imports of crude oil for our country," Yilin said in reply to a question on how competitive Russian crude deliveries were in comparison to supplies from other countries that are also seeking to sell the Chinese market. Russia had a major advantage of geographic proximity to China in respect of crude oil supplies, he said. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry […]

Posted On : Published By : Tom Whipple
Category:

Friendship Between Putin and Xi Becomes Strained as Economies Falter

Photo Presidents Xi Jinping of China, left, and Vladimir V. Putin of Russia in Beijing on Thursday. Credit Wu Hong/European Pressphoto Agency BEIJING — They have met more than a dozen times and stood shoulder to shoulder during Thursday’s military parade here. But the once-vaunted relationship between the Chinese president, Xi Jinping , and Russia ’s leader, Vladimir V. Putin , has come under strain as the economies of their countries have faltered. Two landmark energy deals signed last year for Russian natural gas to flow to China have made little progress and were barely mentioned when the two men met for talks after watching the show of weapons Thursday on Tiananmen Square. The bilateral trade that was predicted to amount to more than $100 billion this year instead reached only about $30 billion in the first six months, largely because of a reduced Chinese demand for Russian oil […]

Posted On : Published By : Tom Whipple
Category:

Russia Acknowledges Economy Recovery Slow in Coming

By Andrey Ostroukh MOSCOW–The Russian government acknowledged on Thursday that the country’s economy is going to take longer to recover than it previously expected, weighed down by the slump in the value of the ruble. Russia’s Deputy Finance Minister Alexei Moiseyev said Thursday that the economy, also battered by a drop in oil prices and Western sanctions, will return to growth no earlier than in late 2015 or next year. The latest forecast from the finance ministry follows a recent drop in prices for oil and gas, Russia’s key exports. Oil prices have tumbled to levels not seen since March 2009 with prices of other industrial commodities on which the country is reliant, such as nickel, also on the slide. Despite calls from many quarters to diversify away from commodities, Russia has made little progress over the years. Previously, the finance ministry said the economy might start recovering in […]

Posted On : Published By : Tom Whipple
Category:

Russia may produce 700 million tonnes of oil, export 300 bcm of gas to China

Russia can increase its oil production to as much as 700 million tonnes of oil per year (14 million barrels of oil per day) and export 300 billion cubic meters of gas to China annually, Rosneft Chief Executive Igor Sechin said on Friday. Speaking at the Eastern Economic Forum, Sechin added that production costs for Russia’s largest oil fields were lower than for its global peers. A weak ruble is offsetting low oil prices for Russian oil producers. (Reporting by Katya Golubkova; Editing by Richard Pullin )

Posted On : Published By : Tom Whipple
Category:

Russia Energy Minister: ‘Fair’ Oil Price Seen at $50-$70 a Barrel

By Andrey Ostroukh MOSCOW–The global oil market is set to stabilize by the year end, with oil prices seen hovering at what seems to be "fair levels" between $50 and $70 per barrel, Russia’s Energy Minister Alexander Novak said Friday. Speaking on state television channel Rossiya 24, Mr. Novak said oil prices won’t return to levels of $100 per barrel in the mid-term. He said though low oil prices have a negative impact on many countries, the world’s oil producers won’t cut production. After years of buoyant commodity prices, Russia is now coping with a rapid slide in the price of oil, its key export. Volatility in the oil market is having an adverse impact on the Russian economy, as it causes sharp swings in the ruble rate, which, in turn, dents investment activity and consumer demand. Presidential aide Andrey Belousov said earlier on Friday, he hopes oil prices […]

Posted On : Published By : Tom Whipple
Category:

For Russia, Oil Collapse Has Soviet Echoes

For most countries, the economic slowdown in China and the accompanying slump in commodity prices represent something between nuisance and pothole. For Russia, they are a catastrophe. Russia’s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The International Monetary Fund predicted in July that Russia’s economy would shrink 3.4% this year, the most of any…

Posted On : Published By : Tom Whipple
Category:

Ruble Falls Second Day as Citigroup Sees Further Weakness on Oil

The ruble weakened, following the biggest drop in more than four months, after Citigroup Inc. said the currency will remain under pressure until oil ends its declines. Russia’s currency fell 0.8 percent to 67.4010 against the dollar by 3:16 p.m. in Moscow after strengthening as much as 0.9 percent. The ruble tumbled 3.9 percent on Tuesday as Brent crude slid the most since May 2011. The currency led the declines among emerging markets on Wednesday. Brent in Rubles Drops “The currency, and more broadly Russian assets, will find a bottom only when the market somehow reaches the conclusion that the oil prices have no further room to fall,” Ivan Tchakarov, a Moscow-based economist at Citigroup, said by e-mail. “I doubt the market has come even close to thinking that.” The ruble price of Brent dropped to 3,305, below the average of the past 12 months, as oil extended its […]

Posted On : Published By : Tom Whipple