The ruble got rid of oil: the rise in price of raw materials will not strengthen the Russian currency

Only radical actions of the authorities will allow to raise the exchange rate of the Russian currency

Having come close to the level of $90, the barrel again began to decline and now Brent quotes are estimated at five “bucks” cheaper. The future of oil prices is in the fog: there are factors that can lead to a continuation of the collapse, but there are also reasons for higher prices. However, despite the growth of quotations of the domestic grade Urals, it is doubtful that “black gold” will provide significant support to the Russian currency, as it happened before, since now the main influence on the ruble exchange rate is exerted rather by the financial policy of our state, and not by the situation on the world market. fuel market.

The beginning of August turned out to be quite positive for oil prices: in the first week, Brent quotes rose from $83 to $88, and most experts were sure that the day was not far off when the barrel would overcome another psychological milestone and hit the triple-digit mark. But supporters of such a scenario were disappointed – the cost of raw materials began to fall. A cold shower for quotes turned out to be alarming signals from Washington about further tightening of the US Federal Reserve’s monetary policy. High inflation forces the regulator to continue raising the interest rate, which leads to a slowdown in the American economy, a decrease in the amount of free cash in the financial market and, as a result, a drop in investments in oil futures by investors.

Sad for the “black gold” news came from China. International analysts were skeptical of Beijing’s announced measures to support the economy, believing that the attempts made by the Chinese authorities to stimulate consumer spending, overcome high youth unemployment and support the real estate sector, do not lead to the desired goal. The pace of production growth is slowing down – in the second quarter of the year, compared with January-March, Chinese GDP increased by only 0.8%, and the depreciation of the yuan after the reduction of the rate by the People’s Bank of China is accelerating.

In the current situation, there is a high probability of a drop in demand for energy resources both in the Western world and in the Asia-Pacific region. It is not for nothing that the International Energy Agency (IEA) has lowered its estimate of oil demand growth in 2023 from 2.45 million to 2.23 million barrels per day. If only the above circumstances persist, according to Vladimir Chernov, an analyst at Freedom Finance Global, by the beginning of autumn, world prices for Brent risk falling to $80-82 per barrel, and this despite the voluntary reduction in production and exports by Russia, Saudi Arabia and other OPEC countries +.

Meanwhile, it is still premature to be upset about the possible continuation of the collapse of hydrocarbon quotes. Unlike the IEA, OPEC experts believe in an increase in exchange purchases of raw materials, primarily by Chinese consumers. According to the National Bureau of Statistics of the People’s Republic of China, the country’s refinery throughput has reached almost 15 million barrels per day, up about 17.5% year-on-year and the third-highest on record. Dmitry Alexandrov, head of the analytical research department at IVA Partners Investment Company, believes that while oil prices continue to be highly volatile, in the event of an increase in consumption in the Celestial Empire, as well as a softening of the Fed’s monetary rhetoric at the end of the fourth quarter, oil quotes will be able to end December at around $87-92 for the “barrel” of Brent.

However, even the fact that the cost of the domestic export grade Urals has already exceeded $70 per barrel due to the reduction in export discounts is unlikely to help the Russian national currency, the exchange rate of which still continues to fluctuate at around 92-93 rubles per dollar. “High oil prices did not support the cost of “wood” due to the shortage of foreign currency in the domestic market, the demand for which from importers on the stock exchange and the population still exceeds supply from exporters. We can say that the ruble broke away from the cost of oil when the volume of foreign exchange earnings from the sale of energy resources on the open market decreased, Chernov explains. – This trend can be overcome by increasing the volume of sales of foreign currency by exporters, which they were informally asked at a meeting with the president, as well as due to the possible tightening of monetary policy by the Russian Central Bank in mid-September. If both conditions are met, then closer to the middle of autumn, Russian banknotes may strengthen to 85-90 rubles per dollar.