As WTI Drops Under $90, Russia Prepares For Great Financial Crisis With $60 Oil "Stress Case" -- Zero Hedge
The plunge in the price of crude oil in the last few months has many global-recovery-truthers questioning their assumptions. Between slowing growth expectations, US (and Libya and Iraqi Kurds and Russia) supply, and Saudi Aramco cutting prices (argued as maintaining market share but has the smell of a quid pro quo over Syria), oil prices have broken below $90 today to 17-month lows. However, for some major suppliers there is concern that more pressure is to come, as Reuters reports, Russia's central bank is working on measures to support the economy should oil prices fall by as much as a third or more, as First Deputy Governor Ksenia Yudayeva as saying the central bank was working on a "stress scenario" that was likely to envisage an oil price of $60 per barrel. Of course, as we noted previously, there is always the 'oil-head-fake' and as one analysts noted, "the main OPEC countries would experience budget difficulties long before that and would have to take action to cut supply."
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My Comment: This is Russia's weakness .... the government's revenues are overly dependent on oil exports and what is the price of oil. And while Russian oil production is still going up (even with sanctions) .... moves by Saudi Arabia in the direction of price cuts must be raising concerns.
This would have made me happy years ago.
ReplyDeleteI have heard of too many suppliers get negotiated to such a low price by a corporation that they went under. I am not talking about Walmart.
Of course the people became unemployed and they were stresses.
This would be scaled up from a city to a state.
Although I admire Putin as a tougher leader than the hapless Obama, I still would like to see him, his cronies and people like them world wide driven from power. There has got to be a better way.