More Bad News for Russia

[mendeleyev]

Interesting, as that is a bank we patronize. It is a "savings bank" in Russian terms and a good one. Gref is usually no dummy, but speaking his mind so freely is not always the smartest move for someone in his position.

[AkMike]

He's about ready to join those last two generals that left their jobs unexpectly.. Cargo 200

[JayH]

Hmmm....but I didn't predict 30 dollar oil.  Despite some expert predictions, and it's closer proximity now, I still have a hard time believing it will go so low.  Possible yes, perhaps briefly, but who knows... As far as the 20 dollar predictions, I don't think so..

Ahh--  28 is a  20 something! One of the best guides we have seen is if the deniers deny! Just like the the pro-Rus believers of anything the kremlin pumps out who advised forum members to rush into rubble to grab the deal of a lifetime--on current rates it would have divided your dollars by  about 2 !!
BTW-- a devaluation on the Rouble is imminent-- will it be at 100?? Or at least close. (fwiw-- back in 2014 I predicted 110-- and no one thought it was possible !)

The price of the futures contract for Brent crude oil March delivery declined by 7.18% to $28.81 per barrel on the Intercontinental Exchange (ICE) in the course of the trading on Friday, according to TASS.


Brent falls below $29 per barrel, first time since 2004

At the same time, the dollar on the Moscow Exchange grew by 2.3% to RUB 77.8, the euro rose by 3.2% to RUB 85.3.
Read more on UNIAN: http://www.unian.info/economics/1238020-brent-falls-below-29-per-barrel-first-time-since-2004.html

: http://www.unian.info/economics/1238020-brent-falls-below-29-per-barrel-first-time-since-2004.html

This is an optimistic view of oil prices-

Oil Sinks Below $30 As Traders Fear Tidal Wave Of Iranian Oil

Oil prices briefly dipped below $30 per barrel this week as the depressed market continues. Market watchers seemed to be competing with each other to see who could publish the lowest prediction for oil prices, with Standard Chartered raising the possibility of $10 oil. It wasn’t too long ago that sub-$30 oil sounded ridiculous, so nobody can predict where the true bottom will be. The only thing that everyone knows is that today’s prices are unsustainably low since a large portion of global oil production is not profitable right now. The big question is when we will hit bottom.

http://oilprice.com/Energy/Energy-General/Oil-Sinks-Below-30-As-Traders-Fear-Tidal-Wave-Of-Iranian-Oil.html

[fathertime]

Ahh--  28 is a  20 something! One of the best guides we have seen is if the deniers deny! Just like the the pro-Rus believers of anything the kremlin pumps out who advised forum members to rush into rubble to grab the deal of a lifetime--on current rates it would have divided your dollars by  about 2 !!
BTW-- a devaluation on the Rouble is imminent-- will it be at 100?? Or at least close. (fwiw-- back in 2014 I predicted 110-- and no one thought it was possible !)

l

Today is the first day oil will likely close below 30 a barrel, it currently is trading at $29.70 a barrel, so your "28" number is fiction at this point.  I did not think it would go this low unless there was a US recession, which we may be entering as our stock market is dropping fairly massively over the past month or so.   


Now as to the Ruble and many of the falling world currencies.  I believe that the currencies are falling, in part, because of the shortage of dollars (Relatively speaking).  There is a shortage because we are destroying wealth at an alarming rate through US company stock market losses.   Most of the currencies I follow are at or near historic lows, everything from the Brazilian Real, to the New Zealand dollar are very weak vs the dollar...rubles included. 


Since oil is usually purchased in dollars,oil producing  nations such as Russia are receiving very strong dollars for their oil, which does lesson the impact of the weak Ruble.


Your one-dimensional predictions about 110-1 Ruble are not likely to be as negatively impactful as you may believe, if they were to ever come to pass. 


Fathertime! 

[mendeleyev]

FT, sometimes it is so painfully obvious that you've never been to Russia that it actually hurts.

Personally I could care less about the price of oil, but I wish that you'd travel and take the time to explain to ordinary Russians just how in hell they are so lucky to have this strong dollar.

At a time when the Russian economy is contracting, the last thing most Russians want is a strong dollar versus a weak Ruble.

I know because I live among and alongside them.

[fathertime]

FT, sometimes it is so painfully obvious that you've never been to Russia that it actually hurts.

Personally I could care less about the price of oil, but I wish that you'd travel and take the time to explain to ordinary Russians just how in hell they are so lucky to have this strong dollar.

At a time when the Russian economy is contracting, the last thing most Russians want is a strong dollar versus a weak Ruble.

I know because I live among and alongside them.

Please TRY to do a better job reading what has been written.


It is a strange reply to what I said.  Where did I say that Russia or its citizenry 'wants a strong dollar vs a weak Ruble?  Where did I even imply that?  It is obvious that they do not, but what I did say was that Russia IS receiving strong dollars for their oil, just the same. The strong dollars have better purchasing power if used to purchase goods from other nations, since the dollar is quite high worldwide.  These are all reasonable points, but you got carried away attempting to create statements I didn't even make or imply. 


 It is painfully obvious you are out of touch with the financial pressures in the USA, and impact that many have already felt here.  Some of which can be at least partially be attributed to the rift with Russia. 


Fathertime!   

[sleepycat]

More educational lessons on economics for FT...
 

[JayH]

Today is the first day oil will likely close below 30 a barrel, it currently is trading at $29.70 a barrel, so your "28" number is fiction at this point.

Unlike your fictional  bs-- no fiction about it-
QUOTING_

"15.01.2016 | 20:38

The price of the futures contract for Brent crude oil March delivery declined by 7.18% to $28.81 per barrel on the Intercontinental Exchange (ICE) in the course of the trading on Friday, according to TASS."  END QUOTE

[fathertime]

Unlike your fictional  bs-- no fiction about it-
QUOTING_

"15.01.2016 | 20:38

The price of the futures contract for Brent crude oil March delivery declined by 7.18% to $28.81 per barrel on the Intercontinental Exchange (ICE) in the course of the trading on Friday, according to TASS[/b][/size]."  END QUOTE

No point in quibbling over a few cents, but there are various prices, it is all closer to 29 than 28...





US oil plunges 5.7% on China, closes at $29.42 a barrel



http://www.cnbc.com/2016/01/14/us-crude-falls-as-market-braces-for-more-iranian-oil.html


Fathertime!   

[mendeleyev]

I read quite well, FT.  You said:

Since oil is usually purchased in dollars,oil producing  nations such as Russia are receiving very strong dollars for their oil, which does lesson the impact of the weak Ruble.

I am going to assume that you meant "lessen" the impact. No, a strong dollar actually weakens the purchasing power of the ordinary Russian citizen. I benefit because I am paid in dollars. But I am the exception as I get to convert my strong currency into a weaker one and afford more stuff.

As someone who owns a business in the USA, I am well aware of the nation's economic pressures--much of it caused by a profoundly ignorant administration that with God's grace will be finished with the next elections cycle.

[calmissile]

I read quite well, FT.  You said:

I am going to assume that you meant "lessen" the impact. No, a strong dollar actually weakens the purchasing power of the ordinary Russian citizen. I benefit because I am paid in dollars. But I am the exception as I get to convert my strong currency into a weaker one and afford more stuff.

As someone who owns a business in the USA, I am well aware of the nation's economic pressures--much of it caused by a profoundly ignorant administration that with God's grace will be finished with the next elections cycle.

 

[fathertime]

I read quite well, FT.  You said:

I am going to assume that you meant "lessen" the impact. No, a strong dollar actually weakens the purchasing power of the ordinary Russian citizen. I benefit because I am paid in dollars. But I am the exception as I get to convert my strong currency into a weaker one and afford more stuff.

You read so well that you added in assumptions that I didn't even write. 

This is where you went wrong with your assumptions.  It is obvious to anybody that a low Ruble harms purchasing power of the most Russians.  That said, Russia is receiving powerful dollars for their oil, these powerful dollars can be used for the military, food, vodka, or whatever else. 

As someone who owns a business in the USA, I am well aware of the nation's economic pressures--much of it caused by a profoundly ignorant administration that with God's grace will be finished with the next elections cycle.

Interesting, so how is this administration 'profoundly ignorant'? What has it caused? This is an opportunity to hit one out of the park because undoubtedly your response will play well here among aspects of the readership. 


Fathertime!   

[alex330]

US storage facilities overflowing. Chinese facilities so full tankers cannot offload. Saudi's keep pumping. Alternative energy in full swing. And now sanctions lifted on Iran.

They say it could even reach ten bucks a barrel within six months....

[BC]

FT
think mendeleyev has the upper hand this time...

A year ago oil was around 60 bucks per barrel and USD RUB around 35 / dollar so 60*35 = 2100 RUB
Now oil is around 30 bucks per barrel and USD RUB around 78 / dollar so 30+78 2340 RUB....
a measly 140 RUB difference.. not much in the grand scheme of things..
But yes, if the RUB continues to devaluate against the USD it's a little 'plus' for RU as long as the oil prices don't sink further...

[fathertime]

FT
think mendeleyev has the upper hand this time...

A year ago oil was around 60 bucks per barrel and USD RUB around 35 / dollar so 60*35 = 2100 RUB
Now oil is around 30 bucks per barrel and USD RUB around 78 / dollar so 30+78 2340 RUB....
a measly 140 RUB difference.. not much in the grand scheme of things..
But yes, if the RUB continues to devaluate against the USD it's a little 'plus' for RU as long as the oil prices don't sink further...

Actually I think you and I are in agreement...the sanctions are  harmful, but the price of oil in powerful dollars mitigates the damage somewhat.  I think Mendeleyev misstated what I said, and then ran with his misstatement, as if it were mine!  I am curious though what in particular makes the current administration 'profoundly ignorant' from his perspective.


Fathertime!   

[fathertime]

The links in my last three posts have clearly demonstrated that the deal is not moving forward.

 
Brass

Yeah right!  For all your shouting, you have incredibly wrong. How incredibly disappointing to you that we didn't try to bomb them to hell and start a large war instead! 



EU's Mogherini says Iran nuclear deal now in force



The European Union's foreign policy chief said on Saturday that an historic deal between Iran and six world powers to lift crippling sanctions on the Islamic Republic in exchange for it drastically shrinking its nuclear program had gone into force.

"Today we have achieved Implementation Day of the Joint Comprehensive Plan of Action," Federica Mogherini told reporters in Vienna, referring to the deal sealed last July

http://www.reuters.com/article/us-iran-nuclear-mogherini-idUSKCN0UU14R

[JayH]

No point in quibbling over a few cents, but there are various prices, it is all closer to 29 than 28...
!

28 is 28 !!
You are so clueless yet you keep making your nonsense posts!

In the real world--
By the end of last week, Standard Chartered had the most extreme prediction. The emerging market-focused bank believes crude could trade at $10. Prices could fall further as investors assume US shale production will be resilient in the face of price movements, analysts said. “In the extreme case, the only definition of a floor would come when the entire market felt that prices had undershot too far.”
Like other commodities, supply and demand drive what price crude will fetch on global markets. The emergence of the US as an oil producing powerhouse has been pivotal in prompting the slide.
Now note--  many are making predictions of very low numbers now.Since the fall started--other complications are now arriving.

Oil price: sell 'any and all rallies' as Iran prepares to pump

At its nadir, overnight oil fell close to 8 per cent from where it had been in London earlier in the day.

Reuters notes that another key factor was leaked data suggesting Iraq's oil output from its southern territories has increased 8 per cent and that total exports could reach a record 3.6 million barrels a day in February. The country is now the second-largest producer in the powerful Opec cartel, adding to concerns the bloc will not make cuts to support higher prices.

With reserves at record levels, investment banks are revising their already pessimistic forecasts lower. The Financial Times says Morgan Stanley has become the latest bank to predict prices would fall to $20, while Royal Bank of Scotland credit analysts capped an ultra-bearish forecast for markets with a call for a low of $16 – and Standard Chartered said the market could reach $10.

"We think prices could fall as low as $10 [a barrel] before most of the money managers in the market conceded that matters had gone too far," the bank said.

It is hard to see how anything more than a brief relief rally will materialise in the near future to prevent further sharp falls.

http://www.theweek.co.uk/oil-price/60838/oil-price-breaks-below-30-with-no-end-to-slump-in-sight

[fathertime]

28 is 28 !!
You are so clueless yet you keep making your nonsense posts!

 

Opps, it does look like you want to quibble over a few cents!

You are both hapless, and clueless.  If 28 is 28 than you are wrong by saying oil is selling for 28, it isn't yet.  There are all sorts of predictions of future oil prices...some are predicting 70 dollar oil in a few years. I even read $250 oil if if we were to have a major Saudi/Iran war It doesn't matter for now, it sells for around $29. Now that Iran will be included in the fold, we shall see if that further erodes the price.  Regardless, your predictions of a Russian collapse have been completely wrong. 


Fathertime!   

[sleepycat]

It's so entertaining watching FT receiving his daily dose of education from Mendy...
 

[JayH]

It is painfully obvious you are out of touch with the financial pressures in the USA, and impact that many have already felt here.  Some of which can be at least partially be attributed to the rift with Russia. 

It's so entertaining watching FT receiving his daily dose of education from Mendy...
 

Yeah--like the idea that the US of A is suffering  like Russia because of Putin's stupidity!!!

[fathertime]

It's so entertaining watching FT receiving his daily dose of education from Mendy...
 

I recognize your feeble attempt to try to inflame, but can't fault Mendeleyev for your ignorance, or inability to score a babe from the FSU.  I will take this opportunity to reaffirm my position. 
1.  Sanctions while harmful,  are not as harmful to Russia as certain people would like, because they are receiving strong dollars for their oil. 
2. The US may be entering a recession, with our US oil and pipeline companies leading the way. What is going on with Russia is certainly a factor.   [size=78%] [/size]
3. Jayh, hasn't proven to be very bright, or convincing.


Fathertime!   

[msmobyone]

FT

economics 101 stuff

2 years ago rouble was approx 35 / dollar and oil was approx 100USD / Barrel ....  3500 Roubles / Barrel.. agreed  ?

Now it's 77 ish / USD and oil is priced at - being generous - approx 30 USD ..         2310 Roubles / Barrel ...agreed ?


Even the Russian finance minister says the break even is 82 usd/ barrel to balance the budget for 2016..

I'm all in favour of playing devil's advocate, but you are being stubbornly 'silly' in your argument that a strong dollar is better for the RF in times of falling oil revenues in dollars.

Then there's the question of the cost of borrowing... harder to find and higher interest..

Have a good day

[fathertime]

FT

economics 101 stuff

2 years ago rouble was approx 35 / dollar and oil was approx 100USD / Barrel ....  3500 Roubles / Barrel.. agreed  ?

Now it's 77 ish / USD and oil is priced at - being generous - approx 30 USD ..         2310 Roubles / Barrel ...agreed ?


Even the Russian finance minister says the break even is 82 usd/ barrel to balance the budget for 2016..

I'm all in favour of playing devil's advocate, but you are being stubbornly 'silly' in your argument that a strong dollar is better for the RF in times of falling oil revenues in dollars.

Then there's the question of the cost of borrowing... harder to find and higher interest..

Have a good day

Hey Msm,
 
I appreciate you attempting to get my point. 


1.  Russia is the seller of oil, so they can get 30 weak US dollars, or they can get 30 strong US dollars.  It is better for them to get 30 strong dollars.
2.  Granted it would be better to get 70 middle of the road dollars.




If the US dollars were weak, and still it took 77 Rubles to make a dollar, then Russia would be totally screwed getting a currency for their commodity that doesn't buy them much.  So yes I do see the benefit a strong dollar has for Russia...so long as they avoid importing expensive US goods, which I suspect they are attempting to minimize.


Fathertime!   

[sleepycat]

or inability to score a babe from the FSU.

Neither can you...
Maybe you would like to convince us how you actually traded upmarket and went the Latina babe route instead.
 

[fathertime]

Neither can you...
Maybe you would like to convince us how you actually traded upmarket and went the Latina babe route instead.
 

Only a fool like yourself would consider a woman's origin 'an upmarket'.  Please enlighten the readership more with your astute commentary! It does explain why you haven't had any success....
  
Fathertime!