The oil market looks like it did at the end of 2014. A year ago, on November 27, OPEC countries decided not to cut production quotas, although by that time Brent oil had fallen in price from $115 to $77 per barrel since June. After that, the price went down, lingered for several days at round marks – $70, $60, $50 – and reached $45.2 on January 13, 2015.

On December 4, 2015, when oil was slightly cheaper than in January, OPEC announced that it would continue to produce as much as it was already producing (and this Thursday it reported that it had produced 31.7 million barrels a day in November, compared to 31.5 million previously, with a quota of 30 million). And now the price is testing the $40 level, pushing it further and further with each passing day.

Minister of Economic Development Alexei Ulyukayev says he expects an average price of $50 in 2016, but even $40 does not pose a threat to macroeconomic stability. It’s good that it does not, but over the past 1.5 years, I can’t recall any adequate forecasts for the oil market and its impact on the economy. A year ago, OPEC Secretary General Abdullah al-Badri and Lukoil Vice President Leonid Fedun said that half of shale production in the US was unprofitable at prices below $80–90 per barrel. But now the US is producing more oil than a year ago. On August 28, 2015, Fedun said that “we will be surprised how, starting next week, a gradual price increase will begin” (quoted by RIA Novosti); there was an increase, but only for three days (from $50 to $55), after which the price went down again.

But I am more concerned about the statements of Vladimir Putin, whose promises on the economy often serve as a good counter-indicator. For example, “there will be no devaluation” in October 2008. Or in January 2012, he boasted that Russia “ranks 3rd among the world’s leading economies” in terms of GDP growth, and “in terms of budget deficit <...> it is in the lead, there is a deficit everywhere.” This was not entirely true, but what is more important is that it was precisely in the second half of 2012 that the economy began to slow down significantly. Or in October 2014: shale oil projects in the US are profitable at $80, Putin said , “if world prices remain at $80, then all production will collapse” (quoted by RIA Novosti). And now in October 2015: “The peak of the economic crisis has passed.”

Meanwhile, oil reserves in OECD countries amount to almost 3 billion barrels (and there are also strategic reserves, reserves in developing countries, 100 million barrels stored in supertankers). In 1998, they exceeded 2.8 billion barrels in the OECD – more than 60 days of consumption, as is the case now. In today's prices, $10 per barrel, to which the price fell in 1998, is about $20. A fall to such a level is now predicted by Goldman Sachs – albeit with a probability of less than 50% and not for long.

Less and less money per barrel