A whole series of circumstances, both political and economic, affects the fact that the price of oil is becoming increasingly beneficial to Russia. Analysts already predict the return of 60 dollars per barrel, or even more. What supports the growth of quotations and how long will this trend last?
On Monday, Brent crude traded around 58 dollars per barrel - and clearly seeks higher, to psychologically important 60. The rise in prices is primarily due to geopolitical factors.
First, the conflict over the affiliation of the oil-rich Iraqi province of Kirkuk, controlled by the Kurds, entered the open phase. Iraqi government troops entered Kirkuk to take control of the oil fields. Export of oil from the region, which held at the level of 600 thousand barrels per day, could be reduced. At the very least, the authorities will need to rebuild the pipeline to export oil through Turkey or agree on sharing the oil revenues with the Kurds.
Secondly, the Iranian factor has affected. US President Donald Trump did not confirm full compliance with the agreement with Iran on the nuclear program. He threatened Iran with new sanctions, which means that restrictions on the purchase of Iranian oil can return to the world market.
Support the market is also the plans of the United States and South Korea to conduct joint naval exercises off the coast of the Korean peninsula. The potential conflict between the US and the DPRK is a factor in favor of rising prices for strategic raw materials.
Finally, the latest statistics show a drop in the number of drilling in the US, and it is already difficult to write off the hurricanes, as before. In addition, the growth in demand is registered by one of the largest consumers of oil - China.
In the medium-term forecast, against the backdrop of geopolitical risks, the importance of fundamental factors-the change in the number of drilling rigs, the balance of supply and demand, and so on-decreases.
Thus, oil is trying to break through an important technical and psychological height - 60 dollars per barrel. "The technical picture speaks in favor of testing this level in the medium term. However, do not expect that the mark in 60 dollars will be passed on the move. Most likely, we will see her repeatedly tested for strength. But overall, the achievement of 60 dollars per barrel is only a matter of time, "believes senior risk manager of Nord Capital IC Vitaly Manzhos.
"If the external environment continues to be positive - but for the time being there is no reason to change the mood - oil prices will continue to creep up," says Anna Bodrova from Alpari.
"In 2018 year I look with moderate optimism. The technical picture speaks in favor of the possible consolidation of oil contracts in the range of 60-70 dollars during the first half of the year. However, very much will depend on unpredictable geopolitical factors, "says Manzhos.
"While it is difficult to believe in the possibility of oil steadily to overcome 60 and 65 dollars per barrel, - the financial analyst FxPro Alexander Kuptsikevich is more pessimistic. "However, even maintaining current levels is a very good result, given that most were adjusted for correction (reduction)."
Growing oil helps strengthen the Russian currency. Forecast Vitaly Manzhos at the end of the year - 58 rubles per dollar. To prevent the strengthening of the ruble could be the forthcoming payments on the external debt of non-financial organizations, the peak of which, as usual, falls on the fourth quarter. However, they are not a surprise for the foreign exchange market, therefore they have largely been taken into account in the current ruble exchange rate, says Manzhos.
"The situation around the dollar and the US economy is increasingly adjusting to a positive mood. Even maintaining current levels of oil prices can cause a reassessment of the situation by large players. Often they expect the ruble to weaken in the final quarter of the year, but a change in prospects will allow the ruble to resume its climb to the highs of the year, "Alexander Kuptsikevich said.
Russia as a whole is seriously benefiting from the fact that the average annual price for oil will be about one-third higher than in 2016 year - about 54 dollar against 42 dollars a year earlier.
The head of the Ministry of Energy, Alexander Novak, calculated in September that due to the increase in oil prices, the budget managed to raise from 700 billion to 1 trillion rubles of additional funds. The minister first of all put it in credit to the OPEC + deal. With a reduction in oil production, the participants in this transaction were able to earn more thanks to higher prices.