Oil tide

The cost of a barrel returned to last year's level

Yesterday, more than $56 was offered per barrel of WTI oil on the New York Stock Exchange. This was the highest figure since November 2008. According to some analysts, within the next few weeks the price of a barrel may rise to $70. However, most market experts warn against excessive optimism, noting that the further movement of hydrocarbon quotations will depend on how the global crisis develops. However, rising oil prices have also pushed up stock markets. Russian securities grew rapidly in the first half of the day. The RTS index managed to jump by 5%, approaching the mark of 950 points, the MICEX index exceeded the psychological mark of 1000 points. According to analysts, the market needs some correction in the near future. Moreover, the market has no internal reasons for growth yet, and enthusiasm for the success of American financial companies seems to be coming to an end.

An upward trend in the oil market emerged last week. The catalyst for growth was the US Energy Agency's announcement of an increase in crude oil reserves in American storage facilities, which turned out to be significantly less than expected - 600 thousand barrels against the predicted 2.2 million. In addition, investor optimism was supported by data on the American labor market, where the pace unemployment growth began to decline compared to previous months. On the NYMEX, the cost of Texas light oil immediately added $2.5 during the day of trading. The North Sea mixture Brent also showed growth (+2.03 $). Its price is now $56.15 per barrel.

“Over the past few weeks, oil prices have been squeezed into a narrow range of $4. This is very little volatility for this commodity. But yesterday there was a strong breakthrough. We have broken through this year’s maximum,” states Sergei Yurov, head of the analytical department of the Barrel Investment Company. In his opinion, in the coming weeks the growth will continue and the cost of a barrel may reach the level of 65-70 dollars. However, he noted that then oil prices may go into a sideways trend: “There is less speculative component in the market, so it is strong, at 5-5. -7% per day, will not grow.” In addition, the expert says, the rise in prices for “black gold” is favorable not only for the oil industry itself - as the price of hydrocarbons rises, the pressure on the ruble will weaken.

Director of the Institute of Energy and Finance Leonid Grigoriev nevertheless urges not to be too enthusiastic about the oil surge that has begun. “We have not reached the prices of November last year, but the normal prices of March 2007. This only means that OPEC managed to somewhat stabilize the market. The further movement of quotes will depend on how the crisis develops,” the expert explained. Aton analyst Inga Foksha is even less optimistic about rising oil prices. “This stabilization is local, temporary and artificial. Oil inventories are now at a record high, and production levels continue to decline. All this speaks against rising prices. In the current situation, we can count on a maximum of 60-62 dollars per barrel, after which a correction will inevitably begin,” she says. According to her, the current growth is due to the fact that large banks have more short-term liquid money, which they invest in long-proven industries. “The world economy was pumped up with anti-crisis money. Banks are in no hurry to use these funds for lending, investing in bonds is also unprofitable due to corporate debt, and emerging markets remain too risky for investment. That’s why the money goes into oil,” explained Inga Foksha. She also added that the rise in oil prices is largely due to the weakening dollar.

European markets grew yesterday thanks to reports from financial companies. British bank Barclays said its first-quarter net profit rose 15% year on year. Against this background, its quotes jumped by 5.2%. Shares of HSBC, BNP Paribas, UniCredit, UBS and Standard Chartered rose by 2.5-3.5%. Meanwhile, France's Societe Generale reported a loss of 171 million euros in the first quarter, compared with a net profit of 1.27 billion euros a year earlier. However, by the middle of trading, the British FTSE 100 index grew by 1.39%, the French CAC 40 by 1.01%, to 3316.58 points, and the German DAX by 1.13%, to 4935.96 points.

With the opening of the American market, the trend changed. At the beginning of trading, Bank of America shares rose by 13%, and Citigroup shares by 5.4% thanks to the statement by US Treasury Secretary Timothy Geithner that the American banking system is able to withstand the crisis. But after the rally on Wednesday, a correction was inevitable. Investors believed that the official announcement of the results of stress tests of the largest banks would not bring additional positive results, since the main results had already become known to the market. As a result, in the first hours of trading, the Dow Jones index fell by 0.97%, the NASDAQ by 2.02%, and the S&P 500 by 0.8%.

Russian shares were losing growth rates along with other markets. By the end of the day, the RTS index rose by 5.04%, to 942.31 points, the MICEX index, which closed 45 minutes later, rose only by 2.59%, to 1011.67 points. Gazprom shares added 4.28%, LUKOIL - 4.23%, Rosneft - 4.12%, Sberbank - 5.18%, Norilsk Nickel - 10.29%.

“The level of 1000 points on the MICEX index was passed easily and naturally in the first minutes of trading,” notes Evgeniy Volkov, head of the sales department of FC Infina. - This is not surprising, given that oil rose above $57 per barrel and futures for American indices were in the positive area. In addition, domestic gold and foreign exchange reserves grew over the week. Against this background, growth was observed with very good volumes. Macroeconomic data from America also did not disappoint, but for one day there was already quite strong growth. And if you consider that it has been observed for the sixth day, then even technically the time has come for correction. Most of the securities have already been overbought, and to continue growth they need to rest for at least a day or two. I think we'll see exactly that on Friday. In the near future, we expect the MICEX index to test the level of 1050 points.”

“The Russian market succumbed to the influence of external negativity and fell significantly in price,” states analyst at BrokerCreditService Investment Company Alexander Chabanov. -- The first sign of decline was that last week the American indices updated their maximum, while the Russian ones abstained. Such dynamics suggest that this two-month rally, built on the good reports of US financial companies, has come to an end, even despite the fact that these companies are indeed showing good results. It is possible that the decline will continue in the short term.”

Petr GELTISHCHEV, Nikolai KOCHELYAGIN