Wednesday 30 March 2016

Russia's economy is surviving cheap oil prices and western sanctions

Russian Energy Firms Survive ' Whammy' of Cheap Oil, Sanctions
With oil staying below $40 a barrel, US oil companies are defaulting on loans and filing for bankruptcy. At the same time, Russian oil firms have managed to withstand double pressure

28 March, 2016

Unlike American firms, Russian oil companies are showing unprecedented endurance. They have managed to survive cheap oil and Western sanctions, Forbes analyst Kenneth Rapoza wrote.

"US energy companies are defaulting on loans and filing for bankruptcy protection as oil prices stay under $40. But their peer group in low cost Russia has managed to survive the double whammy of cheap oil and Western sanctions that have banned them from European and American finance," the article read.

Citing Fitch and Standard & Poor’s rating, the author assumed that low oil prices will not lead to downgrades among Russia’s major energy companies. By comparison, according to S&P, US oil and gas sector accounts for 29 percent of total distressed debt in the country.

The United States’ oil and gas sector has the second-highest sector distress ratio at 79.6%. That is worse than the 2009 distress ratio of 70%, Rapoza wrote.
According to S&P, in the last month, such US firms as Energy XXI Ltd, Denver Parent Corp., PetroQuest Energy Inc., and Chaparral Energy have all defaulted or entered into a debt exchange agreement with creditors.
At the same time, Fitch announced that the credit rating of Russian companies like Gazprom Neft and Novatek will remain unchanged in the next 6-12 months.
The analyst added that the decision by the Russian Central Bank to let the ruble free-float in 2014 was wise. Despite the fact that the weaker rublehas not been good for inflation it has helped Russian energy companies. The devaluation of the national currency boosted ruble-denominated oil incomes.

"Russia has been protected from the full impact of weaker oil prices by a devaluation of the ruble," Moody’s said.

Not only this but Russian weapons firms are winning big-time because of its involvement in Syria

Probable Cause with Sibel

Edmonds: Syria & the Real Winners of a Synthetic Conflict

In this episode we are going to briefly discuss synthetic conflicts. In particular we’ll be looking at the real gains and the real winners- rather than getting lost in the distortion maze that has been designed by the deep state, and implemented via their propaganda tentacles-Media. With all the talk on the ISIL conflict, and with all the speculations surrounding Russia’s in-and-out of Syria maneuver, it is time to put aside the lenses provided by the media (aka the deep state propaganda machine), bring out the magnifier, and search for the truth of these matters by following the money.

Saudi Arabia loses oil market share in key countries

An Arab Gulf man rests on a main street in Riyadh © Ali Jarekji

29 March, 2016

The world’s largest crude exporter, Saudi Arabia has lost its leading position in nine of the 15 top markets in the past three years reports the Financial Times citing data from energy consultancy group FGE.

According to the analysis, the kingdom lost ground in China, South Africa and the US between 2013 and 2015, despite the goal of maintaining its crude market share amid the oil glut.

Saudi Arabia has had very difficult time selling oil in this environment,” Citigroup analyst Ed Morse told the FT. “Its rivals are going into a very crowded market in a very aggressive way.”

The country has also lost its market share in South Korea, Thailand, Taiwan and several western European countries, the FGE data showed.

Saudi Arabia’s share of Chinese oil imports fell from more than 19 percent in 2013 to almost 15 percent in 2015, because of increased supplies from Russia.

Over the past five years, Russian exports to China have more than doubled, increasing by 550,000 barrels a day. Russia surpassed Saudi Arabia as the biggest crude exporter to China in four months during 2015.

Data also showed that Saudi Arabia’s share of South African imports fell sharply during the three-year period, from almost 53 percent to 22 percent as Nigeria and Angola increased their shipments.

Saudi’s share of US imports also dropped from 17 percent to almost 14 percent between 2013 and 2015 due to the US shale oil boom.

The average market share loss across the 15 core countries slowed in 2015 compared to the previous year, according to FGE. However, Riyadh secured crude market share gains in Brazil, India and Japan last year.

The kingdom’s crude exports represented 8.1 percent of global oil demand (excluding its own needs) in 2015, compared to 7.9 percent in the previous year. The figure was 8.5 percent in 2013.

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