Oil falls to $ 30, Russia cut public spending by 10% – The Republic

Milan – Oil continues to fall and is to end Russia as Oman, and before that as Saudi Arabia and even Alaska . The collapse of crude oil goes on to claim victims among governments and companies linked to the sector, while producing countries will alert you and the investment banks see new declines on the horizon. Moscow is only the last in order of time, but the Russian business newspaper – Vedomosti – is in no doubt: the government is preparing for 2016 a 10% cut in public spending to meet the drop in oil revenues. The newspaper would have confirmed anonymous sources directly executive.

collapses, prices, OPEC emergency meeting. All the while the barrel slips to new lows for more than 12 years now, little above the threshold of $ 30, calling the attention of OPEC, the cartel of producing countries. According to rumors close to the presidency of the group, who lives large cracks in it, an emergency meeting could be convened in early March. No shortage of pessimistic forecasts for the sector: the last to see black was Morgan Stanley, which as it did in past weeks another US investment bank, Goldman Sachs predicts a barrel can fall to share $ 20 .

For many months, the black gold accusation sharp declines in reflection of persistent oversupply in the market, tied hand in glove with the weakening of economic growth in many major emerging countries, starting with China. And it is a situation on which until today OPEC has not shown the ability, nor the inclination, to intervene with cuts to the offer. The chairman of the cartel, the Nigerian Emmanuel Ibe Kachikwu, nevertheless pointed out that it had been agreed to examine a possible emergency summit, which could play a BEGINNING March if the barrel was lowered to $ 35. On the whole, also it weighs the expected return to the production of Iran, to which will lift the sanctions. The tension with Saudi Arabia, paradoxically, does not generate an increase in prices as usually happens: the market expects a war of position between the two countries, to defend market share.

The difficulties in Russia. The budget for 2016 has been prepared by Moscow based on an oil price of 50 dollars a barrel, compared with $ 30 that fell on the markets. President Vladimir Putin does not intend to raise the deficit above 3% of GDP, in the name of ” independence ‘of the financial country. According Vademosti, therefore, the Minister of Finance intends to reduce next Friday the 10% public expenditure authorized. The cut should not affect the salaries of civil servants and the military. Finance Minister, Anton Silouanov had planned since last December extraordinary measures to reduce spending and privatization. The ruble fell to 77.04 against the dollar, the lowest since 2004, and to 83.49 euro, near the peak of last Monday.

L ‘opposite trend of oil prices (in constant decline since the summer of 2014) and the exchange rate between the euro and the ruble, with the single currency to strengthen against the weakness of the Russian currency

At the end of Last year, Saudi Arabia announced a record deficit for 2015 of 98 billion euro, while Alaska has admitted it is working on the return of income tax after 35 years of exemptions for residents thanks to the proceeds of ‘ black gold, and finally to New Year Oman he has confirmed it will cut public spending by 15.6%.

Arguments:

oil

OPEC

Russia

Oman

Alaska

arabia Saudi

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