19.10.2020

How much speculators will collapse the price of oil and the ruble

Adverse conditions prevailing in world commodity platforms, gave rise to a sharp weakening of the ruble. However, it is worth Recalling that the monetary authorities at the beginning of this year made it clear to the market that a strong national currency does not suit them, and, running at full mechanisms of the budget rules, they deliberately kept the dynamics of the ruble.

Held in the last Sunday meeting of the monitoring Committee of OPEC is not able to stabilize the situation in the oil market due to the lack of a clear position of the cartel’s plans to reduce production. The Minister of energy of Saudi Arabia Khalid al-falih is only limited to the statement that OPEC and its allies by their actions, try to reduce price volatility, tossing the cherry on the cake in the form of a promise in December to cut exports of “black gold” from the Kingdom by 500,000 barrels per day. However, such rhetoric proved unconvincing to the market, and the speculators after a brief respite, have increased pressure on the cost of a barrel of Brent.

In the future, because of adverse information, associated with report about a possible oversupply of raw materials on the global market in 2019, and projections of the energy information Administration of U.S. Department of energy to increase the production of shale oil in December to 113 000 barrels per day, oil prices pushed to a collapse of the mass closure players of long positions in connection with the triggering of stop orders.

At this stage, the oil market is dominated by speculators, who last month formed a large position at the fall in oil futures. The decline in the cost of a barrel of Brent by more than 7% on Tuesday, November 13, to speak of the capitulation of the bulls, already badly battered for the last time. Now the price of standard grade Brent trying to gain a foothold above the $65 per barrel, and if it is possible, in the medium term we will see a gradual restoration of quotations of oil to $71-72 per barrel.

In the result, the Russian currency started to completely ignore the positive factors that from time to time manifested in commodity platforms, and actively play the negativity associated with the decline in oil prices. However, with the stabilization of oil prices until the end of the year the ruble fully able to go back to the 65-66 range of the ruble against the dollar.

Leave a Reply

Your email address will not be published. Required fields are marked *