Popular analyst Sergei Lyapunov made a new disappointing forecast for Russia for the nearest future:
“Below the rock bottom.
The price of Brent (June futures) almost hit $ 18 per barrel. Minus 30% in half a day. Why did this happen, and what does this news promise us in the very near future?
1. We saw what the Armageddon oil looks like: the price of the May futures contract for WTI went into the negative zone - minus $ 40 per barrel. Reason: the onset of expiration (expiration dates of the futures contract). After expiration, each open contract should be liquidated by physical delivery of oil, and those who have open contracts left to pick up the real oil and find a place to store it. And there are fewer such places and they are becoming more expensive. Therefore, minus $ 40 - the contracts were given not just for free, but with a surcharge, just so as not to hemorrhoids.
- How much oil?
- Is free!
- And what is so expensive ?! (from friends comments)
2. I’ll venture to suggest that exactly 9 days later (April 30), the armageddon will be repeated. Only now will it touch upon the WTI variety not far from Russia, but on the “native” Brent, the price of which is tied to the price of the domestic Urals mixture (that is, almost all of Russian oil exports). It is very likely that today's Brent collapse is a harbinger of negative prices on the expiration date of the June futures. Indeed, over the next 9 days, the situation with free storage capacity will only worsen.
3. The current value of Urals (calculated at real delivery prices and taking into account yesterday's Brent price of about $ 26) is $ 15. Let me remind you that this is precisely the critical level at which the export duty on oil and mineral extraction tax - the two main sources of federal budget revenues from oil exports - are completely reset. And even if armageddon with Brent doesn’t happen by some miracle, the price of Urals in the next month is unlikely to leave the critical zone. There are at least four reasons for this: (i) the price war on the oil market continues, (ii) no one believes in a reduction in production announced by Russia and OPEC, (iii) this reduction, even when executed, covers only a third of the global imbalance in oil supply and demand , (iv) I already said about the free capacities of oil storage facilities.
4. Now is the time to recall the forgotten “Kudrin’s scissors”. In 2008, this term was dubbed the financial effect of the time lag with which the export duty on oil is charged: the duty rate for June is calculated at the average price of Urals for the period from April 15 to May 14. That is, about a week after the failed Victory Day parade, a dispatch will arrive in the Novo-Ogaryovo bunker, sadly stating that export duties and mineral extraction tax will be reset in June and, accordingly, June budget revenues (all in total, not just oil) will collapse at least a third. And this is under the condition that the volume of oil export continues, and he will surely fall. I think, despite the passion of a lifelong gallery owner for all kinds of zeroing, this news is unlikely to please him.
5. But more recently, there was a hope that the worst was over. According to the results of the 1st quarter - amid a sharp drop in oil prices and external demand - Russian commodity exports (oil, pipeline gas, LNG, petroleum products) fell by a quarter. In March, the supply of hydrocarbons abroad fell by 40%. It would seem that here he is kirdyk. But no. At the price of unprecedented self-humiliation, having become a worldwide laughing stock, on enslaving terms, it was possible to negotiate with Saudi Arabia the resumption of the OPEC + deal. Hallelujah! But happiness turned out to be rotten. More precisely, the deal turned out to be rotten, which no one, except Trump, took seriously.
6. Then, the forecast for the current year’s budget arrived in time from the government. Instead of a planned surplus of 900 billion rubles, a deficit of 5.6 trillion is expected. 27% of budget expenditures are not provided with income. And this is with the forecast price of Urals at $ 20 per barrel. But where are they now, these saving $ 20? Bye bye. It looks like now only $ 15 and below. Although if lower, then the Russian treasury is already purple.
7. Then, most likely, a dollar of 100+ will follow, budget sequestration, a printing press in uninterrupted mode ... Well, then - depending on the degree of defeat of the inner circle on the Beck scale (suicidal intent scale). And if this is a problem, then everything is possible - up to the freezing of deposits and new taxes on everything. After all, people, as you know, is our second oil.
- How much do they give now for the oil?
“Today they strike in the face for oil!”