Iran tells, that it is ready to join to oil production levels freezing agreement, because country reached its pre-sanctions production and export levels. So, now there are no big controversies for this agreement signing and, probably, in close months it’ll be accepted. Ministry of Economical Development of Russia forecasts light industry growth in country on 4 % per year level in 2017 – 2019 years; also it reports, that ruble exchange rate influence on inflation ( 6.5% ) equals to 1.3 – 1.5 %, next year it will be negative and ‘ll be equal to -0.1 – -0.2 %. Foreign investors start to invest money again in Russian economy, because now there are the most favorable conditions for this : economics passed crisis downturn minimum and starts to grow, world economy in perspective promises to be stable and will slowly grow and cheap ruble lowers rent and salary payments. This is profitable to both investors and Russians.
In USA amount of oil and gas derricks lowered to minimum : 415, while 1 year ago there were 894 of them – this way low oil prices and no need of further deposits exploration, because there are enough known deposits for medium term perspective, affect this. Partly because of this oil prices strengthen, which leads to ruble strengthening, in its turn. USD becomes cheaper in comparison to Euro on the background of published labor market statistics in USA. IMF informs, that China now should tighten its monetary politics, instead of softening it, because corporate debt of country equals to 160 % of GDP and further key percent rate lowering with other monetary politics softening measures can aggravate this situation. However China’s economics growth rate lowering is not foreseeable at this time. This is all for today in economical and connected political and society events of this week, follow the releases.
Russia and Zimbabwe develop relations and joint projects, so Russian companies will strengthen their positions in gold, diamonds and platinum mining in Zimbabwe, as well as Russian side will supply newest technologies in their mining. Additionally Russia considers ability to supply flour, drought resistant crops species and pesticides; also countries intend to grow together sugarcane and to develop vaccines for farm animals. Oil prices continue to grow, partly this is connected to anticipation of reduction of its production by countries-non members of OPEC, partly with removing from markets of cheap oil from territories, which previously were controlled by ISIS in Syria, and partly with anticipation of increase of demand in it by the end of this year – beginning of next. However, analysts do not have common opinion on how long this grow will go on, there is ability, that after some time this growth will be changed with new lowering.
Russia and Saudi Arabia compete for oil markets of private refineries in China, both countries offer large discounts to foothold on markets; it is also worth the effort to look on Indian market, until Iran did not filled it with its oil and plans to restore production to pre-sanctions levels. European Central Bank started to unofficially remove 500 Euro banknotes from markets, it is told that main reason of this is the fact, that such banknotes are widely used by criminals and banknotes with smaller nominal will make criminal operations much harder. But, probably, this is just one of the reasons, maybe USA push on Europe and try to remove large amount of money in Euro from markets and substitute their dollar in its place. Financial group VTB can receive operation on Sochi Autodrome, which holds Russian stage of Formula 1 race competitions, because Bank of Moscow, which was creditor of object construction, now is the part of VTB group. This is all for today in economical and related political and society events for this week, stay tuned for the releases.
Russia anticipates to receive this year resolution from China to supply additional kinds of crops and their processing products, this will contribute into agriculture development in Russia and will strengthen trade between two countries. Uzbekistan, Turkmenistan, Iran and Oman ratified agreement about “Central Asia – Persian Gulf” transport corridor, which will make it easier and faster to transport goods and resources from Central Asia to Persian Gulf, which will help to develop economically these regions. In the world crisis of steel overproduction continues to go on : China produces it in very big amounts and this leads to price lowering; it is now on such levels, that many European plants are unremunerative and companies have to close them. So, European Union introduces new dues on its import from China; China promises to think about lowerings its production, but now does not intend to increase steel making lowering rates for the sake of European manufacturers.
Meeting in Doha on oil did not lead to agreement about its production freezing, but this rendered only psychological influence on its price and it continues to be formed by physical market factors. USD to currencies of six biggest trade partners of USA continues to lower, which lead to according changes of resources’ prices. This is all for today from world economical events during week.
At this Sunday 17th April in capital of Katar – Doha will be held meeting of oil-producing countries, some of which are members of OPEC and some are not. On it possibility of oil production level freezing will be discussed, which will allow to stop its prices falling and then lead them to growth and stabilization. Countries set their requirements : Saudi Arabia will freeze its production only if other countries will do the same, but Iran does not want to do it and wishes to rise its production level to pre-sanctions level. So, it’ll be hard to come to agreement, but possible still; if this will happen, then oil prices will start to slowly grow and stabilize; economics of Russia and ruble will follow it; if not, then ruble exchange rates with other currencies will have large volatility and new meetings on the same theme will be held. Both scenarios can be thinkingly used for personal benefit.
On this week it became known, that Saudi Arabia threats to sell USA‘s obligations on 750 billions USD, if congress will approve law, that allows to bring to responsibility SA’s government, which, presumably, is involved in acts of terrorism in USA at 11th September of 2001 year. It will be hard to do this technically, but, if part of these threats will be implemented, then this can decrease USA’s economy growth; however, there is possibility, that USA will freeze these funds and confiscate part of them later, as compensation on SA’s government involvement in 11th September 2001 year acts of terrorism. There is some wrestling between these countries go on : Saudi Arabia tries to run down shale oil production in USA, USA answers, as it can, SA threats to answer in its turn and so on. All in all, for Russia it is profitable for those countries to not cooperate tightly and to not be able to make strong influences on world economy areas, which directly affect country’s economy. So : let them wrestle further and pursue their own interests. This is all for today in economics area.
On this week Egypt и Saudi Arabia signed agreement about creation of investments fond with 16 billions of USD capital; this should contribute to economical development of the region and implementation of large industrial projects, which will lead to increase of income of citizens and work places amount. Central Bank of Russia told, that it will decrease key rate for increasing of credits availability for companies, but with taking into account keeping inflation in acceptable range and decreasing it to 4% in 2017 year; it will not force restrictions on currencies trading and will not try to fix ruble course, to not cause disbalance in economics. Oil prices are slightly increased after publication of information about decrease of its reserves in USA, which caused small growth of key stock indices of country, there is ability to anticipate similar movements of indices of other countries too. Britain Ministry of Foreign Affairs called China to decrease steel production level to increase its prices and make plants profitable; situation is similar to oil in some respect. India is ready to invest 20 billions of USD in development of Iran port Chabahar to increase oil and gas trading amounts of two countries; by this India will also pay part of debt to Iran for supplied oil. And to conclude today, not exactly economics, but interesting anyway : astronomers told about possible discovery of new planet in Solar System, which, presumably, causes anomal movements of other bodies in this space area. It can cause deviations of comets and asteroids movements and send them into inner areas of Solar System, to Earth inclusively, hitting of which of our planet caused mass extinctions of live organisms on Earth in ancient times; but rumors, appeared in some mass media, about “Close Judgment Day” and “No later, than before the end of April” are too exaggerated : in near time ( some millions of years ) no things of such scale are foreseeable from astronomical point of view.
Lets start to make small reviews of world economical events to develop in this area and to be in course of things, that happen in it. On this week Ruble continues strengthening relative to USD, Yuan does the same on the funds of Central Bank of China, which invested in economics of country around 22 billions of USD. Due to cheap oil and small revenue from its selling Russia and Saudi Arabia reduce defense spendings, maybe after today’s meeting there’ll be some movements toward agreement about its more moderate extraction, so that its price will stabilize and go to optimal level. Government of South Africa wishes to accept agreement with Russia on nuclear energy development in country, which will be good for its citizens and Russia citizens too. Chinese military forces established first marine forces base in Africa, which signals about increase of interest of one of the economically strongest countries in region; maybe, this will contribute to stabilization of situation on continent and will decrease destabilizing influences of USA on region’s countries. This all for today, next review will be in around 1 week.