One step away from 40

On December 4, the Organization of the Petroleum Exporting Countries (OPEC) held its 168th meeting in Vienna. Obviously: the cartel has lost its power over black gold

The oil market is in a fever again. The North Sea Brent blend, which Russian grades are guided by, has once again stopped at a step from $40 per barrel, and by the time the issue hits the kiosks, this step can be taken. It is pointless to attribute everything to the machinations of speculators, since the reasons for the continued slide in oil prices are exclusively market ones. The latest collapse was triggered by data on US oil inventories, which are rising for the tenth week in a row, and analysts worry about the time when the storage capacity for oil and petroleum products will be full. Iraq and Saudi Arabia have increased production to maximum volumes, and Russia is not far behind them. Iran is looking forward to the lifting of sanctions and is preparing to return to the world market in January and immediately with large volumes. In the European and American markets, exporting countries are fighting for the buyer, not disdaining dumping and offering very impressive discounts to the exchange price. There is no doubt that Iran, in order to win its place under the sun, will offer an even more generous discount. Hopes for the collapse of the "shale counter-revolution" have not yet justified themselves: the number of drilling rigs in the United States is declining, and production is practically not falling. The picture is completed by the slowdown in the Chinese economy, as a result of which the demand for raw materials has seriously dipped, as well as a warm winter in the USA, which negatively affects the consumption of boiler fuel.

So there are market prerequisites for further oil price reduction. Only two circumstances kept the exchange "bears" from storming another round figure in the middle of last week. Firstly, the markets (all, not only raw materials) were waiting for the meeting of the European Central Bank held on Thursday, where its head Mario Draghi, as expected, promised not to turn off the printing press and extended the quantitative easing program until March 2017. And secondly, the sellers did not take decisive action and update the minimum on the oil market until the end of the OPEC meeting in Vienna. Someone else has a glimmer of hope that Saudi Arabia, which has unleashed a trade war in order to win back its former share in the world market, is too exhausted by the hostilities and is ready to go to the world. To do this, however, independent exporters, primarily Russia, must demonstrate a similar readiness. But this hope is too illusory. OPEC has already had the sad experience of agreements with Russia, which, having promised to reduce exports, immediately increased it to the maximum post-Soviet levels. In fairness, it should be noted that discipline in OPEC is by no means up to par, and far from all members of the cartel observe quotas.

So it turns out that the chances of seeing a barrel of Brent blend cheaper than $40 in December, when the Fed raises rates, or in January, when Iran returns to the market, can be regarded as three to one. Is it possible to earn money on this? Undoubtedly. It's no secret that the Russian currency depends on the price of oil in the most direct way. The budget includes a price of $50 per barrel, and the Ministry of Finance, if the price is lower, can fulfill the revenue plan in the only way available to it - through devaluation. Since the dollar exchange rate in the budget is set at 63.3 rubles, it is easy to calculate that the Ministry of Finance will feel relatively comfortable at a barrel price of 3165 rubles, which means the exchange rate is 78.9 rubles. for $1 at an oil price of $40 per barrel.

The chances of seeing a barrel of Brent blend under $40 in December, when the Fed raises rates, or in January, when Iran returns to the market, can be regarded as three to one