HomeMediaLatest NewsWe can fall another 1-3 rubles

We can fall another 1-3 rubles

02 November 2020

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute commented to the Business Online newspaper on the current situation in the world oil market and the ruble exchange rate.

Marcel Salikhov, President and the Head of the Economic Department of the Institute for Energy and Finance draws attention that in addition to the second wave of the pandemic, the oil price fell due to the increase in production in Libya. The National Oil Corporation of Libya may add soon about 500-700 thousand barrels per day to the world market, the expert notes, which inevitably affects the quotes. The third factor is related to the possible victory of Joe Biden in the US presidential elections: the Democratic candidate has an active environmental agenda, which includes restrictions on oil and gas companies and support for renewable energy sources.

As for the domestic currency, all possible risks are already included in the current exchange rate. “To a large extent, the potential for price reductions has been realized, all this bad news is already in the oil and ruble prices. We can drop another 1-3 rubles, but this is most likely all,” Salikhov says. Since current prices per barrel are too low, much of the production will not pay off and supply will then begin to decline, which will strengthen the price.

The decrease in the key rate of the Central Bank also led to weakening the ruble. Now the potential for a rate cut is almost exhausted, so it will not put pressure on the ruble, the expert believes.

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