PUTIN'S RUSSIAN RULETTE
Even as Western sanctions over Ukraine bite, crashing oil prices are hitting Russia's economy and government finances.
OPEC announced on Thursday that it will leave production unchanged, despite hopes from some members to cut output to push prices. Instead, oil prices have plunged further, with U.S. crude tumbling below $70 a barrel.
A Russia oil tycoon on Lukoil's board predicted that OPEC's action will drive out unprofitable U.S. shale plays, reducing supply and boosting prices. Indeed, U.S. shale stocks plunged Friday. While U.S. marginal production could be affected down the road, Russia's economy is in trouble.
The Russian ruble has tumbled vs. the U.S. dollar amid growing concerns about the Russian economy. Capital is streaming out of the country while foreign investment is drying up. Russia's central bank spent a substantial sum in a futile attempt to defend the currency.
Russia's GDP is still rising, at least in rubles. But pricey imports and soaring inflation are starting to hit Russian businesses and citizens.
There are concerns about dollar-denominated borrowing by Russian businesses and banks. That in turn, could spur President Vladimir Putin to provide bailouts, especially to state-run enterprises.
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GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.