Oil prices this year managed to stabilize around the $55 per barrel mark, and in recent months even went higher, besides, prerequisites for further growth were created. So what will the price of oil be next year?

Experts are increasingly voicing price forecasts in the range of $50-60 per barrel, that is, in fact, they do not expect any changes.

However, recent years have clearly shown that fluctuations in the oil market can be very strong, often even reminiscent of a tsunami.

President Vladimir Putin also announced his forecast last Friday. It also does not expect major changes:

Vladimir Putin

"We believe that in the second half of 2017, excess oil will leave the market and oil prices will stabilize. We expect that they will stabilize at today's level."

The President does not hide that he relies on the forecast of the Ministry of Energy. In general, everything looks logical: if OPEC and non-OPEC countries fulfill their obligations to reduce production, excess oil will leave the market. Of course, there is also the US shale sector, which is likely to increase volumes, but not so much, so there are prerequisites for stabilizing oil prices, but they are limited for further growth, since then a new shale boom will begin in the US.

As Minister of Energy Alexander Novak rightly noted, there is no escape from technological progress.

On the other hand, we note that the financial departments of the Russian Federation, in particular the Ministry of Finance and the Central Bank of the Russian Federation, do not want to succumb to an optimistic mood and calculate their forecasts based on an oil price of $40 per barrel. This is a rather important point, because in the past we often heard the phrase "oil prices will recover", but in the end it turned out the other way around, which in turn turned into serious problems for the economy.

In the short term, the likelihood of an increase in oil prices is still preserved. Many respected experts expect the price of a barrel of Brent blend at $58-60. However, from a technical point of view, the picture remains uncertain.

We see that prices have not been able to break through the upper boundary of the expanding formation, so there is still a possibility of a price decline from current levels. Apparently, it is worth waiting for January and see how OPEC members will fulfill their obligations to reduce production.

If there is even a single hint that the deal will fail, speculators will not fail to take advantage of this and start the game for a fall. Producing countries should understand this very well.



Last week, the largest analytical companies in the world made two forecasts for oil. The first forecast predicted a drop in oil prices to $20 per barrel, the second one turned out to be more optimistic: an increase to $80 per barrel. Where is the truth?

$20 - Goldman Sachs

Analysts at Goldman Sachs give a different figure: $20. In their opinion, an oversupply of oil in the world will contribute to maintaining low oil prices until 2030. As bank spokesman Geoffrey Curry said, "price bottom" for oil is expected in the spring of 2016, when refineries are closed for technical repairs.

$20 - Ali Al Naimi

The oil minister of Saudi Arabia noted that the “bottom” of the oil price is at around $20, as the Arab countries do not seek to increase prices, but to increase their market share, writes the Russian portal 111999.ru. Currently, the price of oil continues to fall against the backdrop of a disproportionate increase in supply in the market in relation to demand.

The main factors shaping this process are:

• Increase in oil supply by OPEC countries;
• Growth in US shale oil supplies;
• Activation in the Iranian market.

$25 - German Gref

The head of the Sberbank of the Russian Federation claims that at the end of 2015 we can expect oil to fall to $25 per barrel. Greff noted: “It won’t be good, but it definitely won’t be as good as it was.” However, even a low price will not lead to the bankruptcy of Lukoil and will not at all ensure the collapse of the global economy. On the contrary, in 2016 an active increase will begin.

$40 - Morgan Stanley

According to the experts of this financial institution, such a price may already be formed by the end of 2015. After that, there will be a small and short jump upwards, which will take place at the beginning of 2016.

$65-69 - analysts of major global investment banks

At present, many oil trading countries only benefit from economies of scale. However, the excess of demand growth rates over supply growth rates leads to the gradual displacement of weaker participants from the market. In addition, all seller states will soon need to win back their positions. In this light, since the beginning of 2016, the price of "black gold" will begin to gradually increase and reach a peak value in the 4th quarter, reaching 65-69 dollars.

$70-75 - independent international experts

Despite the political prerequisites for changing the price of oil, "black gold" has its own cost, which cannot be ignored. In the US, the cost of shale oil at different fields ranges from $20 to $80. As a result, the average break-even point is 57-58 dollars. Currently, the United States and OPEC countries can trade oil at a price below cost, since their losses are offset by income from the sale of futures contracts relating to these same transactions. However, the terms of the latter are expiring, and from 2016 these countries will have to sell “black gold” without taking into account derivative financial instruments, focusing on cost alone. In this light, a sharp rollback of prices to the level of 69-70 dollars per barrel is coming.

$80 Bloomberg

Bloomberg published an article saying that world oil prices will gradually rise. And as a result, oil prices will rise to $80 per barrel by 2020. According to Delovoy Kvartal, analysts made such conclusions on the basis of internal materials of the Organization of Petroleum Exporting Countries (OPEC).

The report says that the organization expects a decrease in the growth rate of oil production in countries that are not part of the cartel. According to preliminary estimates, oil production by 2017 will amount to only 58.2 million barrels per day, compared to 59 million barrels per day, which was mentioned in the previous materials of the cartel.

Total

Thus, despite the difference in opinions, one general trend can be established: oil quotes will reach their “bottom” at the end of 2015. Next year, a gradual increase in prices will begin, but sharp jumps should not be expected at all. At the same time, positive changes in the cost of oil will have a positive effect on exchange rates, GDP and the welfare of most countries in the world.

That the Russian economy is in for a difficult year. This is due to the fact that it is very dependent on oil.

The average oil price in 2016 was $43 per barrel. This is far from what it was two years ago, when it cost more than twice as much. According to the Russian Federal Customs Service, oil export revenues account for 26 percent of total export earnings. For an economy where exports account for almost 30 percent of GDP, this is a very significant amount.

This problem manifested itself in a sharp increase in Russia's budget deficit in 2016. In 2015, the budget deficit was $25 billion, or 2.6 percent of GDP, according to the Russian Ministry of Finance. But in September, the head of this ministry said that the budget deficit forecast for 2016 was revised upwards. By the end of the year, it could reach 3.7 percent of GDP.

Therefore, Russia climbs into its reserve fund. It also cuts social spending and pension benefits.

We do the math

How many "pens" have been broken, how much ink has been used up on the topic of rising oil prices since OPEC agreed to cut production on November 30! Let's leave aside the fact that the price of oil has not jumped up. (The price of Brent at the close of trading on December 14 was only 11 percent higher than on November 28).

Instead of making assumptions about market fluctuations, it will be more interesting to understand what exactly the price of oil is significant from the Russian point of view.

Russia's Finance Ministry said earlier in the year that the country would have a deficit-free budget if the price of oil reached $82 a barrel. But we don't trust politicians' statements, so we decided to see if we could come up with the same numbers (or better ones) if we made our own calculations.

Context

Tillerson's conflict of interest over Russia

Vox 12/15/2016

Russia Controls Global Oil Deal

Die Welt 12/13/2016

Who buys Rosneft shares?

The Wall Street Journal 08.12.2016

Norway earns billions on Putin's game

12/06/2016
Russia publishes information on oil export earnings in metric tons and in dollars. According to the Russian Federal Customs Service, from January to October 2016, the country exported oil worth a total of $59.6 billion. This is about 213 million metric tons. Converting metric tons to barrels of oil is not easy. Each brand has its own density. The generally accepted conversion factor from metric tons to barrels is 7.33 (data from the BP Statistical Review).

Analyzing Russian export statistics in this way, two conclusions can be drawn. First conclusion. In the first 10 months of 2016, Russia produced almost five percent more oil than in the whole of 2016. And this means that this year it needs to sell more oil than last year. Second conclusion. It is estimated that Russia will export about 5.13 million barrels of oil per day this year.

Go to zero

Now we have to move on to assumptions. Russian statistics show that in 2015 the country exported $76.7 billion worth of oil at an average price of $41.85. With data only for the first 10 months of 2016, we are forced to make assumptions. But let's proceed from the fact that in November and December of this year, Russia exported in monetary terms the same amount as the average for the first 10 months. (Actually, the amount may be slightly higher). It turns out that the total amount of Russian oil exports in 2016 will be approximately equal to 71.52 billion dollars.

We also need to consider recent comments by Russia's Energy Minister indicating that Moscow has agreed, albeit in lip service, to coordinate its oil production with OPEC in accordance with the reduction agreements reached. In 2017, it will cut production by 300,000 barrels a day. Assuming that this volume falls below average production, Russia will export about 4.8 million barrels a day next year.

As noted above, the budget deficit in Russia in 2016 should be $48.1 billion. If Russian oil exports for 2016 are estimated at $71.52 billion, then Russia will need to export $48.1 billion more oil to achieve a zero budget deficit. Priced at around $68 a barrel, based on daily production of 4.8 million barrels. This is slightly less than the forecasts of the Russian finance minister, which he made this year. But there is nothing unexpected here.

The Russian State Duma recently approved the budget for next year. Some figures from it, say, for certain items of defense spending, are not openly published. Apparently, the minister knows some other expenses unknown to us, which must be taken into account. Or maybe he just wanted to lower expectations.

Too Much Oil

This means that Russia needs a price increase of about 30 percent from the current rate. This is only to ensure that the budget is deficit-free. But even such a serious increase in prices will not solve Russia's economic problems. It will simply allow her to maintain the current level of spending without getting into various reserve funds.

But there are already cuts in various social services in spending. The Russian Ministry of Finance predicted that in 2017 all funds from one such fund will go to cover the budget deficit. Russia expects that this deficit in 2017 will decrease to three percent of GDP.

At the moment, a significant increase in oil prices seems unlikely. The market is overstocked. The world's leading economies are forecast to stagnate at best. And the more the price rises, the more the United States will increase oil production.

Monthly chart

OPEC's November 30 production cut agreements significantly improved views and forecasts of oil price behavior for 2017. Due to the coherence of market participants' actions, many pivot points naturally emerge on the way to the desired result. Following the agreements supports the confidence of market participants in the reality of the fulfillment of tasks and the controllability of the entire process. If before the decisions in Vienna, the adjustment of oil supply and demand was expected in the market at the end of 2017, now this can happen even at the beginning of 2017. due to the accelerated reduction of world reserves (IEA). Ideally, one can count on the price movement for $60 - to $70, the desire for which is given out, for example, by the latest statements of Venezuela and Iraq. Of course, for the sake of fulfilling their budget plans, the OPEC countries will try to ensure a certain transparency in the announced reduction process. Thus, by agreement with Russia, a committee will work to control the reduction in production, which will monitor the situation with oil production. Iran and Venezuela this week agreed to meet OPEC and non-OPEC in the first quarter of 2017. on the same topic of transparency. Saudi Arabia has already shown good will in terms of transparency.

On the night of December 9, Saudi Aramco began to notify customers of a reduction in deliveries in January. We are talking about deliveries mainly to Europe and North America, where the excess supply of oil is the largest. Saudi Arabia is going to supply Asian consumers with raw materials in the same volume. According to the so-called operational tolerance rules for long-term contracts, the supplier can ship in volumes plus or minus 5-10% of the agreed volume. Saudi Arabia is going to use these rules to unilaterally reduce supplies. In total, Saudi Arabia has pledged to cut production by 486 thousand barrels. from 10.544 million to 10.058 million barrels Recall that in August the country produced 10.603 million, and in the first quarter of 2016. 10.147 million

OPEC's decision to cut production. Problems with exceptions. At the November 30 summit, OPEC “signed” to a decision to cut production by 1.166 million barrels. This figure was rounded up in news feeds to 1.2 million barrels. It is noteworthy that Libya and Nigeria were excluded from the formulas for calculating the reduction in OPEC production (at the suggestion of Russia). Consequently, any significant increase in production in these countries will automatically reduce the contribution of the cartel to the stabilization of the oil market.

Nigeria's oil minister on Dec. 8 said the country would reach production levels of 2.1 million bpd. Already in January 2017 Considering that the current Nigerian production is estimated by the minister at 1.6 million barrels (Reuters gave an estimate of 1.7 million barrels for November), it turns out that the African country has a very significant (in this context, negative) “contribution” to the market stabilization. True, from slightly earlier statements by the minister it follows that the country is going to maintain the level of production at an average of 1.9 million barrels. It is worth remembering that modern “Robin Hoods” - Nigerian avengers have repeatedly interfered with government plans to increase production and broke them. And the minister was therefore, one might say, restrainedly optimistic. In any case, reports of new attacks on pipelines do not yet disturb the news outlets, the last attack of the avengers took place on November 27th.

Libya at the beginning of November seemed to be a calmer place than Nigeria. On November 16, the head of the National Oil Corp. announced an output of 0.6 million barrels, plans for 0.9 million barrels. at the end of 2016 and 1.1 million barrels. in 2017 Back in August, Libya produced 0.27 million barrels. However, as it turned out, the recent victories over (banned in the Russian Federation) ISIS do not at all put a barrier to internal squabbles among the winners, do not interfere with the civil war of different groups for control over oil assets. On December 7, there were attacks on the armed forces controlling the oil ports. The attack was repulsed, and the clash of factions bypassed the current oil production. But it is clear that the unstable situation hinders the increase in oil production.

OPEC wants to see production cuts outside the cartel as well. It is quite possible that Nigeria and Libya will add 0.6 million barrels of oil by February. additional supply on the market and these volumes will increase the total production of the cartel. This may have been the origin of the figure of the desired reduction in oil production of 0.6 million barrels, which OPEC presented to non-OPEC countries. In full, it (the figure) will be discussed at the meeting on December 10. Optimism in anticipation of these negotiations in Vienna is given by the information that Russia will agree to cut production by 300 thousand barrels.

OPEC production growth in November. On Monday, December 5, the oil market was negatively affected by a Reuters study, which said that OPEC production increased by 0.37 million barrels in November. up to 34.2 million barrels Naturally, when looking at the headline, the question arises of how OPEC will achieve its goals if the production in the cartel is actually increasing, and the level of its level is moving further and further from the declared target of 32.5 million barrels. We said above that the question of the relevance of the stated goals is inevitable, since the production of Libya, Nigeria is taken out of the brackets of the general reduction equation. But it turns out "it's not so bad." The November increase in Libya and Nigeria is estimated by Reuters as "only" 110 thousand barrels. And most of the increase came from "distant" Angola. Its contribution to the increase in production is very large +250 thousand barrels. but practically harmless. The fact is that in October they were under repair at the Dalia field, their return to work ensured an increase in November production. At the OPEC summit on November 30, of course, they knew that the fields were not working. Therefore, the reference level of production in Angola was adopted not actual, but cleared of fluctuations - at the level of 1.753 million barrels. According to the OPEC agreements, - according to the “approvement” of the cartel - Angola will reduce production from January by 80 thousand barrels. to 1.683 mln barrels Meanwhile, in its study, Reuters indicated that Angola produced 1.42 million barrels in October and 1.72 million in November. In other words, there is no practical benefit from Reuters' indication that Angola's production has increased in relation to OPEC agreements. OPEC took this circumstance into account.

Real problems with the reduction in production of the second OPEC country - Iraq. One of the surprises of the November 30 OPEC summit was Iraq's agreement to cut production by 210,000 barrels. - from 4.561 million barrels. to 4.351 million barrels Meanwhile, the Iraqi government has not yet been able to agree with the Kurdish autonomy (12% of national production) on sharing the burden of OPEC's decision. There is no certainty that foreign companies (BP, Shell, Exxon Mobil, Eni) will not demand compensation under contracts for an artificial decrease in production volumes. Thus, state-owned companies that produce only 440 thousand barrels, of which 160 thousand barrels are under the total threat of production cuts. falls on federal production in all the same Kurdistan. How Iraq will get out of this situation, with the help of what statistics it will report to OPEC, is not yet clear. Obviously, it is easier for the Russian government to talk to its oil companies.

Negotiating positions of Russia. In July, Russia produced 10.862 million barrels. per day, 10.71 million barrels. in August, 11.11 million barrels. in September, 11.204 in October, in November, 11.21 million, approaching the record of Soviet oilmen of 11.42 million barrels. in 1987 It is obvious that the policy of maximizing production makes it possible to reduce it relatively painlessly by 0.3 million barrels. from a maximum of 11.2 million. On December 5, Transneft President Nikolay Tokarev predicted that Russia would be able to start actually reducing oil production in March 2017 as part of a deal with OPEC.

Seasonal decline in demand and increased competition. Anticipating that it will be the flagship in the reduction of production, Saudi Arabia in early December reduced its OSP prices for January for arab light for Asia by $1.2. The OSP (differential) has been downgraded from a $0.45 premium to the Dubai benchmark to a discount of -$0.75. Thus, the country expects to compete for its share in the Asian market with Russia, Iraq and Iran Selling at a discount is all the more relevant because the rise in prices on the stock exchange may dampen the appetites of Asian consumers. The Asian market is considered more promising than Europe and America. Oil imports to China rose sharply in November (+18% yoy) after slowing down in October. 32.35 million tons or 7.87 million barrels were imported into the Celestial Empire. per day after the “modest” 6.78 million in October. OSPs for Northwest Europe and the Mediterranean were raised by Aramco by $0.3 and $0.5 respectively. For the US, the OSP price is reduced by $0.3.

USA news. This week, data on the fall in US oil inventories (-2.4 million barrels) did not prevent the fall in the price of brent. Traders were impressed by the growth of oil stocks during the week (26.11-02.12) in the Cushing hub (+3.8 million), their largest increase since January 2009 was recorded. One of the motives for stockpiling is the expansion of contango with long-range futures, encouraging traders to stock up for future use. In theory, the decision of OPEC on November 30 works in favor of changing the situation - reducing the contango. Another reason for the increase in stocks in the hub is the desire of refineries to reduce their production stocks at the end of the year in order to avoid ad valorem taxes.

Curious but true. In the US, there is a tendency for shale producers to hedge oil sales in 2017. at a level above $50, which indicates their cautious attitude towards the latest price rise.

Brent's annual low of 27.1 on January 20 turned out to be long-term, and the price was able to complete the minimum 23.6% rebound in the 2014-2016 range (27.1-115.75) to 48.01 and go higher. Now it is possible to move to the first Fibonacci range (38.2%) - the level of 60.95. A reversal (bullish) “inverse head and shoulders” pattern appears on the chart with potential support for the right shoulder 41.51 (left shoulder 42.23), and the resistance of the neck line 52.86-54.05 is blurred.

Weekly chart

The week (05.12) began with a new annual high (55.33), which was set on a wave of optimism after the decision at the OPEC summit on 11/30/16. Some cooling inside the day (5.12) is due to the release of studies showing an increase in OPEC production in November (Reuters (+0.37 mn and Bloomberg (+0.2 mn)). During the week, the focus of traders gradually began to shift to the meeting between OPEC and non-OPEC on December 10. On Tuesday, December 6, prices fell on doubts just around the OPEC agreement and its feasibility. So everyone was surprised that Saudi Arabia significantly reduced prices for January for Asia. On the same day, the EIA raised its forecast for oil production in the United States from 8.83 million barrels to 8.86 bbl in 2016 and from 8.73 to 8.78 mln bbl in 2017. On December 7, data on the growth of gasoline inventories in the US outweighed data on the fall in oil inventories. On December 8, prices bounced upwards, as traders focused on the December 10 meeting of OPEC and Russia's position, which supports the idea of ​​reducing production, has played a positive role here.

The weekly chart shows an expansion of oscillatory movements starting from August. The upward movement occurs without a bright upward breakdown.

Weekly data from the EIA on December 7 on the fall in oil inventories did not play a big role, the price of brent fell. Oil imports to the US increased by 0.755 million barrels. to 8.303 million barrels. Refining utilization increased by (+0.6%) (90.4%)

Tab. Data on oil reserves in the US 7.12.2016

Average daily production in the US for the week ended December 2 fell by 2 thousand barrels. including in 48 states they fell by 2 thousand barrels, but in Alaska they did not change.

Daily chart

On the daily chart, we see a price bounce up on December 8-9 before the meeting of OPEC and non-OPEC on December 10. Thanks to the position of Russia, traders allow the idea of ​​a possible creation of a “non-OPEC” cartel, which will also work to stabilize prices. However, while only Russia and Oman are ready to cut production, not all countries came by invitation, so there is no full confidence in the overall success of tomorrow's event. Uncertainty about the success of OPEC agreements on November 30 did not allow fixing a breakdown of the previous annual high of 53.73

Summary of Brent Tiers

Main supports 52.81..50.47..45.92

Main resistances 55.33…57.44..58.83..60.94

«Expert Online» December 28, 2015. The variety of oil price forecasts is amazing, they differ by an order of magnitude - from 10 to 100 dollars per barrel. It is quite logical to ask for a comment from a specialist who gave more accurate forecasts in the past. We asked Oleg Grigoriev, scientific director of the Neoconomics Research Center, to comment on the situation in the commodity and financial markets. Interviewed by Dmitry Gavrilenko

No one doubts the dependence of the Russian budget on oil prices today. Under such conditions, the lack of a correct forecast of oil prices cannot but be a risk factor for long-term economic planning. But the variety of oil price forecasts is amazing, they differ by an order of magnitude - from 10 to 100 dollars per barrel. The largest Western banks during 2015 were forced, retroactively, to revise their oil price forecasts for 2015 downward. Therefore, it is quite logical to turn to a specialist who gave more accurate forecasts in the past for a comment. We asked the supervisor of the research center "Neoconomics" to comment on the situation in the commodity and financial markets Oleg Grigoriev.

Oleg Vadimovich, in your forecast for 2015, you said that Russia expects a 5% decline in GDP, did not see any prerequisites for the strengthening of the ruble, but considered a drop in the exchange rate to 80 rubles per dollar as an unlikely scenario. You advised us to forget about oil at $100 per barrel for a long time, seeing the price maximum for 2015 at $80 per barrel and a minimum of $40 with the possibility of a short-term price drop below $40. Even earlier, during the acute phase of the 2007-2009 crisis, after oil prices from $140 to $40 per barrel, you predicted a short-term increase in oil prices caused by the US Fed's quantitative easing program to the level of "100 and above" and then falling to the level of 2009. How do you assess your past forecasts today, did they fully coincide with your model of the economy?

It is impossible to say that everything happened exactly as I expected - things happened that were unexpected for me. As for our own model, which we use today, its main principles were formulated two and a half years ago, and began to be fully used only a year ago. Previously, there was only a general understanding of economic processes and we had to pay more attention to the opinions of other specialists in certain sectors of the economy, evaluating them from the point of view of our understanding of the economy. When we weren't using the model yet, we had a not-so-good moment at the end of 2013, when there were very strong arguments within our team in favor of an increase in oil prices, and in favor of a recession. The only thing was clear that the price of oil would not stand still. I believed that prices would fall, but I compromised, as the arguments in favor of rising oil prices were very strong.

What kind of arguments were they?

There was a lot of free money in the world that had nowhere to go. The banking sector and corporations have huge funds in their accounts. The Swedish financial sector is choking, where there is a huge influx of euros and they do not know what to do with them - there is a negative rate on the interbank market. From my point of view, in the conditions of a deflationary crisis, this money supply is hoarded (saving - Expert). But the argument against hoarding was the thesis that the main money is with institutional investors, that is, with investment funds and corporations. For example, any investment fund is simply obliged to invest, its declaration says that no more than 5% can be in the form of cash. In the same way, corporations cannot remain in cash, they will be asked by the board of directors, shareholders, what they were doing. Therefore, in 2013, we gave a forecast that oil could go both “up” and “down”, because we knew for sure that prices would not remain stable. We have learned from this lesson and no longer compromise, solving the problem to the end.

As a forecast of the price bottom, we constantly heard from oil market analysts the wording “it can't be lower”. At first, it could not be below 80, then below 60, 50, 40, and now, as it turns out, below 36. Where do you see the price bottom?

Yesterday (December 22 - Expert), we had a big annual meeting on the forecast for the year. We think in trends, not bottom levels. In principle, especially in the current conditions, it is quite possible that the price will fall to $20 per barrel. But this is very short-term and outside the trend. The general trend is $30 per barrel and will fluctuate within the range of $30-35 within six months.

Tell me, was the statement of the President of Kazakhstan Nursultan Nazarbayev, dated August 19, 2015, about the corridor of oil prices of 30-40 dollars per barrel, dictated, by any chance, not by your consultation?

It's hard to say for sure, but, oddly enough, although we don't listen to much here, we have very close contacts with the Kazakh government and staff of the presidential administration of Kazakhstan.

Some oil companies claim the cost of oil production at $5 per barrel. What prevents oil prices from dropping to $10 until reserves of higher-cost oil already produced are exhausted, while oil fields below $10 will continue to produce?

It is difficult to say what is meant by "cost", most likely it is the operating cost. When there is already a finished well, where the rocking chair is located, the entire infrastructure has already been built, then this is probably possible. But if we calculate all the costs of developing the field, the cost of building infrastructure, and transportation costs for transporting oil, the cost of Russian oil should be added to the cost of Russian oil at least $10 per barrel. As long as there are enough explored deposits, it is possible even to slightly increase production due to the intensification of production, which is what we are doing now. But in a year, a maximum of two or three, oil production will decline. New deposits, starting from a cost of around $30, are unprofitable to put into operation. Therefore, a drop in the cost of oil below $20 is possible only for a very short time - a month, a maximum of two. Even at current prices, Canada dropped out of oil production, although the volumes there were not large. Platforms are already stopping in the North Sea and the Brazilians are stopping their offshore platforms.

The latest news from the oil market on "bulls" and "bears" in the oil market, in terms of their shares and other indicators, suggests that there are still "bulls" in the oil market and they are betting on the second half of the year. And this coincides with our assessment of the beginning of a price reversal in the upward direction. The upward trend will focus on a maximum of 60, but most likely at 50 dollars per barrel. The factor of shale oil will not allow it to reach values ​​in the region of $100. Shale oil production is easily curtailed during periods of low prices, but also easily unfolds during periods of rising prices.

There has been a lot of talk about shale oil being unprofitable at $60/bbl, but are we seeing continued production at $35/bbl WTI?

Firstly, it fell by 400 thousand barrels per day, and secondly, it is obvious to me that today the cost price for most shale deposits is $35-40 per barrel. Everyone is using data from two years ago on the cost of producing shale oil. During the use of this technology, it was possible to significantly reduce the cost of shale mining. With a cost of $40 plus transportation and a small margin, we're back on our $50, $60 per barrel trend. This does not mean that exactly in the second half of 2016 there will be exactly 50, but we will move towards this price.

Your forecast was exclusively about the "oil" factors of price changes. But if we assume that the US Federal Reserve decides on another quantitative easing program, will this have a significant impact on the growth of oil prices?

The price will not rise to $100 even with a new quantitative easing program. Unlike 2009, when this happened, today we have the factor of the same shale oil. Huge investments have been made in this industry and today the supply of oil can be instantly increased.

Oil ceased to be "black gold"?

In the US energy mix, shale oil makes up 5% and wind energy makes up 5%. There is a lot of talk about lifting the ban on oil exports from the United States, but they do not say that at the same time huge funds are provided for the development of wind, solar - "clean" types of energy. Subsidies for alternative energy sources are “tied” to the amount of profit that US oil companies will receive from exporting oil. Although these energy sources are still subsidized by the state, subsidies are getting smaller and smaller. Due to the mass production, the cost of equipment is falling and the cost of the obtained alternative energy is almost comparable to the traditional one. The factor of alternative energy sources could even have a macro effect on the German economy. In autumn there was a slight decline in the industry, which is explained by the fact that the summer was sunny and windy, and the autumn turned out to be cloudy and calm, which caused a decline in the development of alternative energy sources. The country's GDP begins to depend on these factors.

Are electric vehicles becoming a significant factor influencing the cost of oil?

I think that the factor of electric vehicles will not start to influence today and not tomorrow, despite the gigantic progress in this area. From the point of view of the economy, the electric car has not yet reached an acceptable level. But we, as an energy superpower, must take this trend into account. After all, the development of the Arctic shelf is as distant a prospect as an electric car. And their intersection can play a trick on us if we make investments today, and then it turns out that we made them in vain. Shale mining has also been an expensive toy for a long time. It was not Barack Obama who supported shale mining, it was under George W. Bush. By the way, even before the crisis of 2008, Expert magazine published an article in which it showed the dynamics of oil drilling in the United States, their rapid growth. There was no mention of shale, then no one was talking about it yet. Since the author assumed that we were talking about traditional drilling, he therefore believed that the effect of increasing oil production would work immediately and there would be a decrease in oil prices. Now we understand that it was drilling in shale, and everything was very difficult - initially, drilling was often carried out in vain. It was a great lesson for me to pay attention to any oddities in the global economy.

But Europe does not produce shale gas?

As long as Europe has a lot of money, it can afford to flirt with the "greens", close nuclear power plants and refuse to produce shale gas. But shale gas is produced in the US, the US is ahead of Russia in terms of production, and the cost of gas in the US market is about $70 per 1,000 cubic meters. I understand why we have a lot of experts do not pay attention to this, of course we really want Russia to be good, but let's distinguish reality from what we want. If I say that oil will be 200, it will not cost 200 because of this, even though I will repeat this a hundred times. And if we tell each other that shale is a bubble that will burst, then nothing good will come of it. When we advise firms, we start by explaining to owners to be "paranoid" and regularly ask themselves "why do I still exist?". When running the country, I think this organized "paranoia" should also be present. If the cost of oil is 100, then you need to understand why 100, that this is not just a law of nature, what made up these 100 dollars. And understand that if these factors are not met, then the oil will not be 100, but in a completely different way. The management of a separate firm differs little from the management of a separate state.

Is the forecast for the gas market, as well as for oil, also negative?

The gas market is a special market. The United States is preparing to supply gas for export, and probably will supply it, but this will not happen quickly. They have no infrastructure, it has yet to be built. This is a rather expensive infrastructure for liquefying, transporting and diluting gas. If Europe starts producing shale gas, then we can focus on the price level in the US, adjusted for less successful fields. In addition, in Europe, all the land has long been divided and there are no such empty spaces as in the United States, which will also lead to an increase in the cost of production. A possible guideline is $200 per 1,000 cubic meters. Although it is unlikely to drop significantly below $200 in Europe, the long-term trend is a decrease in the cost of gas. When gas became possible to transport, it began to be massively found. It is possible that earlier these deposits were known, but they did not know what to do with this gas. A common mistake of a monopolist is to keep the price too high and force the buyer to look for alternative sources of goods. Saudi Arabia created OPEC, capped oil production with quotas, and enjoyed high prices for a while. The first bell rang in the mid-80s - the whole world began to look for oil and prices went down. Shale oil is a confirmation of our theory about the technological division of labor. We say that the technological division of labor is aimed at combating natural limitations. There was a factor of natural limitation of traditional oil fields, and due to a higher level of division of labor, shale oil appears and removes this natural limitation. Just like solar and wind energy, these are more high-tech industries and, accordingly, with a higher division of labor, which are also aimed at removing natural restrictions and monopolies. Monopoly is broken by increasing the level of division of labor. For me, this is an example confirming the work of our economic theory.

What prevents other economists who, seeing the same processes as you, at the same time constantly make overestimated forecasts for the cost of oil?

Oil is so mythologized...

How's the gold?

I would say more than gold. It's quite a long story, starting with "The Limits to Growth" Dennis Meadows(report to the Club of Rome in 1972, based on the thesis of the exhaustibility of natural resources - Expert), science fiction about it, Hollywood films or the Australian film "Mad Max". Perhaps this cultural environment is having an impact. I can't explain this with anything other than the over-mythologization of the oil factor.

In gold, which is now worth $1,070 per troy ounce, what is the proportion of mythologization?

It is very difficult to say this because it is not only a mythologization, but also a religion. The religion of billions, if you take into account the Chinese and Indian population. Mythologization turns into real demand.

Does it make sense for the Central Bank to keep part of its reserves in gold?

Here is an example, now Nicolas Maduro (President of Venezuela - Expert) is forced to sell gold reserves with financial losses. And what if we enter the market with the sale of gold, or China, which is losing almost 100 billion dollars of gold and foreign exchange reserves a month? It will crash the market. It is enough to look at Venezuela and ask how much this possession of gold gave them? Why did they do it?

Are other commodities also on a downward trend?

Producer prices in China have been negative for the past three years. Only consumer prices are supported by rising wages. Europe is struggling with real deflation. Everyone looks at oil, but look at the cost of copper, nickel, at the level of their decline. As for aluminum, I don't understand how RUSAL works if they announce an average cost almost twice as high as current prices. As long as there is a global deflationary crisis, the fall in commodity prices is inevitable. There will be a cycle of interest rate hikes by the US Federal Reserve, which will inevitably cause massive manufacturer bankruptcies and falling commodity prices. After that, I expect a new program of quantitative easing.

Apart from the belief that the rate should be positive, is there a rationale for raising it?

They are guided by their cycle model. The cycle model says that someone must go broke, resources must be freed up, and the remaining highly efficient producers must receive these resources, and then growth will be sustainable. Everyone understands what he did Ben Bernanke in a crisis and why he did it. But this did not allow them to go bankrupt, in their opinion, inefficient. The Fed actually says - "we warned you, gave you 7 years, and now whoever did not hide - we are not to blame." But the whole problem is that the majority of companies, over 80%, are at risk. Most companies have enough margin of safety for another one or two rate hikes within six months, after which the process of bankruptcy will take on a mass character.

We have a deflationary crisis of the entire world socio-economic model, and I adhere to the view that it will go on for a long time, slowly. And we will go down in small steps. Although many say no, everything will “explode”. We must pay tribute to the leadership of the Fed, Ben Bernanke, he is actually a great man - he saved both the world economy and the American one.

Many still cannot understand how the emission carried out by Ben Bernanke did not cause inflation?

I'm just re-reading The Accumulation of Capital. Rosa Luxembourg, where she first tried to show the difference between financial and consumer money. An increase in the volume of consumer money can cause severe inflation. The quantitative easing program is an increase in the amount of money in the financial sector. The world economy was then on the verge of a severe deflationary asset crisis, and emission prevented this from happening.

What is happening with the Russian financial sector today?

For 11 months of 2015, the Russian banking sector showed 500 billion rubles of profit and 200 billion rubles of loss. That is, the total profit is 300 billion rubles. Now we take Sberbank with a profit of about 300 billion rubles, remove it from this combination and get the result - the rest of the banking sector has worked to zero. The banking sector has no areas in the real economy where it could make a profit. The population has long been indebted and is even starting to get a little out of credit. With a 10% drop in real incomes in 2015, the population is unable to increase consumption. The drop in retail amounted to 11.3%. It would be possible to earn on export, but apart from raw materials and products of the first processing stage, we export almost nothing. Due to the devaluation, metallurgists breathed a little easier, the chemical industry and the production of fertilizers began to feel better. The bank only takes its share of what the real sector earns, respectively, if the real sector has nothing to earn on, then the bank too.

Does it make sense to invest in agriculture, which should have been successfully developed thanks to retaliatory sanctions?

Look at the balance sheet of the Russian Agricultural Bank, which would have been bankrupt if not for the constant injection of capital from the state. Nowhere in the world is agriculture a profitable sector, it is dated by the state.

What is your forecast for the Russian banking sector?

We have never had full supervision in the banking sector. If we analyze bank closures, what do we see? We have two categories of license revocation - either a "laundering office" or bankrupt. If the “laundering office” closes, then the balance sheet is still analyzed, and large holes are revealed in it. And if the license is revoked due to bankruptcy, then the hole in the balance sheet sometimes turns out to be many times larger than originally expected. If we take any bank with good reporting and check what will be revealed there, we cannot even imagine. The regulator forgave a lot of things to Russian banks during the crisis of 2008-2009, and a lot of “garbage” has remained on their balance sheets since then. Then the task was simply to survive for the Russian financial sector. Therefore, I am sure that the Central Bank will continue to "clean up" the banking sector at the same pace - up to 100 banks a year. Systemically important banks, of course, will bail out at any cost, while the rest are at risk. This year, many banks still lived on reserves, but next year, especially against the background of the ongoing economic downturn, and the real sector will fall by another 2-3%, it will become even more difficult for them to survive. The situation in which it is impossible for banks to earn money is pushing their owners to withdraw assets.

How do you see the equilibrium exchange rate of the ruble at the current oil price?

The Central Bank completely took control of the situation in the foreign exchange market, building an ideal system based on the current situation. True, this happened after the situation got out of control of the Central Bank last year. Initially, the Central Bank was interested in a slight devaluation and did not intervene, and when it decided to intervene, it was already too late. Today's ruble exchange rate seems to me more or less balanced. Banks have very large foreign exchange positions, they practically do not attract foreign currency deposits, for which rates have dropped sharply. If oil prices drop to $30 per barrel, we will see the ruble exchange rate no more than 80.

Could a deeper devaluation of the ruble become a driver for economic growth following the example of 1998?

Then there was a different situation, except for the quadruple devaluation, the growth factor was free production capacities, which are not there now. Today, even with the most significant devaluation, we will be forced to purchase equipment for foreign currency and it is not known whether this machine will pay off in our market. Something can develop, but it will not be massive, as in 1998. We work with mainly medium-sized companies, all companies have a birth date of 1998-1999. The rise of 1998 was the perfect confluence of several circumstances. Half of the entrepreneurs went bankrupt during the 1998 default due to non-payments. But the rest, which managed to be paid under contracts, including bankrupt colleagues, ended up with money, production capacity and growing demand. By 2003, the effect of the devaluation came to naught. Then oil prices began to rise, the real estate bubble began, consumer lending developed, and foreign capital began to flow. But this was another driver of economic growth - not a devaluation one.