On Friday, May 22, oil prices are falling during global trading. At the beginning of the session, the cost of raw materials of the Brent reference brand on the ICE exchange in London fell by more than 7% - to $ 33.6 per barrel. At the same time, quotes of the American WTI grade fell by 10% - to $ 30.7 per barrel. In the afternoon, the values recovered somewhat to $ 35.3 and $ 33.4, respectively, but still remained below the closing level of previous trading.
Prices went down after a steady increase in the last few days. So, on the eve of the price of Brent rose to a maximum since mid-March and was approaching the mark of $ 37.
According to experts, global investors reacted negatively to the actions of the Chinese authorities. The leadership of the Asian republic did not begin to set a target value for the country's economic growth rates for 2020, Xinhua reports.
As RT analyst at Freedom Finance, Yevgeny Mironyuk, explained to RT, amid the uncertainty surrounding the COVID-19 pandemic, the Chinese authorities freed themselves from burdensome obligations to follow a specific goal of GDP growth. As a result, the dynamics of the Chinese economy and oil consumption in the country may be weaker than investors' expectations. This state of affairs puts pressure on oil prices.
“Failure of China to achieve its goal of GDP growth in 2020 will reduce the potential amount of financial incentives for economic growth that the government can use. On the one hand, this will reduce the amount of funds in the financial markets of the country, and on the other hand, China's economic growth may be limited, which will reduce the demand for raw materials, ”Mironyuk explained.
At the same time, oil prices continue to support the weakening of quarantine measures in a number of countries. According to the estimates of the International Energy Agency, by the end of May, under the conditions of restrictions, about 2.8 billion people will live in the world, compared with 4 billion in April. According to experts, the gradual return of people and enterprises to work over time should lead to a restoration of global demand for fuel.
“More and more states are reporting a relaxation of restrictions. This allows us to hope for a quick start to the restoration of normal activity of the global economy. Accordingly, energy consumption in the world should begin to grow, ”said Alexey Kalachev, an analyst with Finam Group, in a conversation with RT.
In addition, state measures to reduce the global supply of hydrocarbons play in favor of oil prices. Recall, from May 1, to combat the global overabundance of oil, the countries participating in the OPEC + transaction, including Russia, began to reduce the production of raw materials by 9.7 million barrels per day. A decrease in production also began in several other countries - exporters of raw materials, including the USA, Norway, Argentina and Canada. Moreover, Saudi Arabia announced its intention to further reduce oil production by another 1 million barrels per day.
According to IEA estimates, in May the supply of oil on the world market should decrease by 12 million barrels per day and reach the minimum level over the past nine years - 88 million barrels per day. According to the Russian Ministry of Energy, in the coming months, the total volume of reduction in production by global hydrocarbon producers may reach 15-20 million barrels per day.
“First, globally, oil prices are supported by a reduction in production under the OPEC + deal. Secondly, we are already seeing a record reduction in the number of drilling rigs in the United States. Accordingly, the supply of hydrocarbons is reduced, and the threat of overflowing storage is relegated to the background, ”added Kalachev.
Over the past week, the number of active oil rigs in the United States decreased by 21 and reached 237. The last time a similar value could be observed back in the summer of 2009. This is evidenced by the company Baker Hughes.
The decline in oil prices at Friday's auction put some pressure on the dynamics of the Russian currency. So, in the middle of the day, the dollar exchange rate on the Moscow Exchange grew by 1.5% - up to 72.1 rubles, and the euro exchange rate - by 1.1%, to 78.6 rubles. Moreover, on the eve of the first time since the beginning of March, the values fell below 71 and 78 rubles, respectively.
The official exchange rate of the Central Bank as of May 23 is set at 71.88 rubles per dollar and 78.44 rubles per euro.
According to RT, the head of the analytical department of AMarkets Artem Deev, in the near future the ruble will continue to respond to fluctuations in commodity quotes. According to experts, until the end of May, oil prices will vary in the range of $ 32-37 per barrel. At the same time, the tax period will provide additional support to the national currency.
At this time, exporting companies begin to sell foreign currency and buy rubles for taxes.
In addition, the Bank of Russia continues to play in favor of the ruble. To stabilize the ruble exchange rate, on March 10, the Central Bank began proactive sale of foreign currency on the domestic market. Thus, the regulator artificially increases the demand for rubles. In total, over the past time, the volume of sales of foreign currency amounted to 649 billion rubles.
Against this background, according to the forecast, the director of the BCS Broker sales office Vyacheslav Abramov, in the near future the dollar will remain in the range of 70-75 rubles, and the euro - near 76-82 rubles.