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Oil tripped up the government of Medvedev

Нефть подставила подножку правительству Медведева

About the budget surplus of Russia soon will have to forget

The price of oil, which is directly tied to the Federal budget, continues to decline. For the first time since April, they fell below $ 70, and falling. It seems that the government forget about a giant windfall, the budget surplus, however, and of wasteful mega-projects.

The price of collapsing the Americans?

The price of crude oil of mark Brent has overcome psychologically important mark — it dropped below $ 70 per barrel. Speed monthly fall was the highest since July of 2016. This occurred, American analysts “of the Agency energy information”, on the background of a few trends.

First, extraction of crude petroleum in Saudi Arabia and Russia reached the highest levels, which helped to compensate for many months of losses from short supply from Iran and Venezuela. In addition, significantly faster than forecasts had resumed oil production in Libya, which is now more than 1 million barrels per day.

Second, the record shows oil production in the United States. According to published forecasts, the oil production until the end of 2018 will increase to 10.9 million barrels per day (which is 1.5% higher than the October forecast), and next year will rise to 12.06 million barrels. However, according to analysts, this may lead to another problem — the lack of pipeline capacity in the U.S. and Canada.

Third, reports about economic growth in China came in below forecasts, also slowed macroeconomic indicators and in several other countries. Consequently, reduced demand from major buyers.

Predictions about the cost of oil is also not very optimistic: in particular, investment Bank Goldman Sach believes that by the end of 2019 the price of Brent crude could fall to $ 65 dollars.

The first “under the knife” will go national projects

About what the risks for the Federal budget-2019 bears the drop in oil prices, the “Free press” was discussed with a senior research fellow at the economic policy Institute, a member of the Board of the Foundation “Liberal mission” Sergey Zhavoronkov.

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“SP”: — Sergey Vladimirovich, the decline in oil prices has affected the increase in production, including in Russia. So we shot ourselves in the foot?

You’re right, back in June, “OPEC plus Russia” increased production. First, Venezuela, where the country is falling apart, has fallen by itself. Second, in November to join the US sanctions on Iran (the last time, however, when these sanctions were joined by the European Union, the supply of Iranian oil on the market dropped by half a million barrels). Therefore, it was decided that it is possible to increase production.

But the non-participation of the EU in sanctions against Iran is the most important issue, because they are the biggest buyers of Iranian oil. So, apparently, rushed to increase production.

“SP”: — whether the government is panicking because of cheaper oil?

— The price is still comfortable. The Federal budget is calculated, proceeding from the price $ 63,4 for “barrel” — so while the current price in the region of the allowed values. No need to panic I do not see. Fluctuations in the oil market during the month do not form a trend, a trend we can speak about three months — if the price for three months will fall.

“SP”: — In the current year due to record growth in oil prices was an additional budget of almost 3 trillion. Well, is it not logical to direct this money on development of human capital — demography, education, culture?!

Yeah, next year marks small increase in expenditures related to “Education” and “Health”. But in absolute terms they decreased from last year’s plan. And in fact this fall, as planned inflation for three years will be 12% and the cost increase it will not block.

However, even in absolute terms, spending on “Social policy” is a transfer to cover the deficit of the Pension Fund. This is expected: the government took away the pension from those who had them out. That “savings”. The presidential elections are behind us, new in five years and the authorities do not see the need to increase social spending.

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“SP”: — Plus the cost of the projects.

— Look, yesterday announced the construction of high speed railway (HSR) “Chelyabinsk — Ekaterinburg”. About this line, nothing is clear — in the budget it is not recorded! Here and VSM in Kazan for six years without money sits, although it is more tempting to the minds of the government the idea (because there is a theory that Kazan will go directly to China).

The national projects mostly don’t need objectively. Well, as I’m guessing the sales of smartphones for officials with local software (actually just a small foreign firms that bought “Rostelecom”)? In short supply of money they will go under the knife in the first place, you can be sure.

“SP”: — so you do not exclude that the deficit is possible. But due to what his government would cover if the external loan market has actually closed for Russia?!

Well, not quite closed. Bill Graham-Menendez in the United States has not yet passed, and while the ban on the purchase of Russian government debt is nowhere. And not the fact that even in the case of the transformation of the bill into law, it will mean cross-sanctions against those who will start to buy our national debt (from the bill that you should not directly), and Europe itself is unlikely to join the law.

Economic news: US media: Russia has only benefited from sanctions against Iran

Oil and gas: “We are drifting to the fact that for petrol-will pay 5 thousand”

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